Hedging through currency contracts etc
50 Hedging through currency contracts etc
Subject to this section, AA may enter into and deal with approved contracts for hedging purposes in relation to the following:
money raising by AA;
investment of money by AA;
acquisition by AA of goods or services;
a transaction in foreign currency.
The Minister may give written guidelines to AA for the exercise of AA’s power under subsection (1). AA must comply with the guidelines.
Without limiting subsection (2), the guidelines may provide that:
AA is not to enter into or deal with contracts of a particular kind; or
AA is to enter into or deal with contracts of a particular kind only if the contract relates to specified matters.
In this section:
approved contract means a contract of any of the following kinds:
a forward exchange rate contract;
a contract with respect to currency futures;
an interest rate contract;
a deferred delivery contract;
a contract with respect to financial futures;
a contract with respect to commodity futures;
a contract relating to:
dealings known as currency swaps; or
dealings known as interest rate swaps; or
dealings known as commodity swaps;
a contract relating to 2 or more of the dealings referred to in paragraph (g);
options (including futures options);
a contract of a kind approved in writing by the Minister.
hedging purposes means reducing or eliminating risks of adverse financial consequences to AA, and includes the following:
reducing or eliminating the risk of adverse variations in:
the costs in relation to money raising by AA; or
the revenue obtainable by AA; or
the costs in relation to acquiring goods or services by AA;
maintaining the value of:
investments made by AA; or
property used as security for money raising, or proposed money raising, by AA.
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.