Collateral policy and investment of collateral General. In conjunction with transactions in OTC financial derivatives and efficient portfolio management techniques, the Manage- ment Company can in the name and on the account of the fund take receipt of collateral in order to reduce its counter- party risk. Received collateral must be deposited for the fund with the Custodian or with its agent. This section describes the collateral policy applied by the Management Company in these cases. All of the assets received by the management company in the name and on the account of the UCITS (securities lending, securities repurchase transactions, reverse repurchase transactions) within the context of efficient portfolio management techniques shall be treated as collateral within the meaning of this section. The Management Company can use the collateral it receives to reduce the counterparty risk, provided that it adheres to the criteria set out in the respective applicable statutory provisions, regulations and guidelines issued by the FMA, above all in terms of liquidity, valuation, creditworthiness of the issuer, correlation, risks associated with the administration of collateral and realisability. Collateral should fulfil above all the following conditions: All collateral that does not consist of cash should be of good quality and high liquidity, and should be traded on a regu- lated market or a multilateral trading system with transparent pricing, in order to ensure that they can be sold promptly at a price that corresponds approximately to the valuation before the sale. It should be valued at least daily, and assets that exhibit heightened price volatility should be accepted as collateral only if they are subjected to reasonable conservative discounts (haircuts). They should be issued by a unit that is independent of the counterparty, and should not be expected to correlate strongly with the performance of the counterparty. They should be sufficiently broadly diversified across countries, markets and issuers, with a maximum collective expo- sure of 20% of the net asset value (NAV) of the fund in individual issuers, taking account of all received securities. The fund may deviate with the further regulations set out above under 7.3.5 – 7.3.7. They should, however, be realisable by the Management Company at any time, without recourse to or approval by the counterparty. The Management Company shall stipulate the necessary level of the collateral for transactions with OTC derivatives and for efficient portfolio managemen...
Collateral policy and investment of collateral General. In conjunction with transactions in OTC financial derivatives and efficient portfolio management techniques, the Manage- ment Company can in the name and on the account of the fund take receipt of collateral in order to reduce its counter- party risk. Received collateral must be deposited for the fund with the Custodian or with its agent. This section describes the collateral policy applied by the Management Company in these cases. All of the assets received by the management company in the name and on the account of the UCITS (securities lending, securities repurchase transactions, reverse repurchase transactions) within the context of efficient portfolio management techniques shall be treated as collateral within the meaning of this section. The Management Company can use the collateral it receives to reduce the counterparty risk, provided that it adheres to the criteria set out in the respective applicable statutory provisions, regulations and guidelines issued by the FMA, above all in terms of liquidity, valuation, creditworthiness of the issuer, correlation, risks associated with the administration of collateral and realisability. Collateral should fulfil above all the following conditions: Liquidity Any collateral other than cash or sight deposits must be highly liquid at a transparent price and must be traded on a regulated market or within a multilateral trading system. In addition, collateral with a short settlement cycle is preferable to collateral with a long settlement cycle because it can be converted into cash more quickly.
