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CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS    View history reference

PART 7.1 - PRELIMINARY    View history reference

Division 3 - What is a financial product?    View history reference

Subdivision B - The general definition    View history reference

SECTION 763C  

763C  WHEN A PERSON MANAGES FINANCIAL RISK  

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For the purposes of this Chapter, a person manages financial risk if they:


(a) manage the financial consequences to them of particular circumstances happening; or


(b) avoid or limit the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices and interest rates).

Note 1: Examples of actions that constitute managing a financial risk are:

(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or entering into a currency swap.

Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur).


 



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