HEDGING REPRESENTATION Sample Clauses
A Hedging Representation clause defines the parties' statements regarding their use or non-use of hedging activities related to the contract. Typically, this clause requires each party to disclose whether they are entering into the agreement for hedging purposes, such as offsetting risk from other financial exposures, or for speculative reasons. By clarifying the intent behind entering the transaction, the clause helps prevent misunderstandings and ensures regulatory compliance, particularly in derivatives or financial contracts where hedging status can affect legal and tax treatment.
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HEDGING REPRESENTATION. (The following must be completed by Customers who will engage in transactions for bona fide hedging purposes only.) Customer has indicated on the New Account Information Form that the Account is for hedging purposes. Customer represents that it is familiar with CFTC and exchange rules, regulations, and advisories concerning hedging. Unless Customer specifically notifies UBS-S LLC to the contrary in writing with respect to any transaction, all transactions effected for the Account will be bona fide hedging transactions as described in Section 4a of the Commodity Exchange Act, as amended, and any rules promulgated thereunder (a copy of which may be obtained from UBS-S LLC upon request). As such, in accordance with CFTC Rule 190.06, Customer may specify whether, in the unlikely event of UBS-S LLC’s bankruptcy, Customer prefers that the trustee liquidate open commodity contracts in the Account without seeking Customer’s instructions. Accordingly, in the event of UBS-S LLC’s bankruptcy, the trustee should (check one of the following): ¨ Attempt to contact Customer for instructions regarding the disposition of open contracts in the Account. ¨ Liquidate open commodity contracts without seeking Customer’s instructions. This instruction may be changed at any time by written notice sent to UBS-S LLC. Specify Commodities to be Hedged: