(1) A designated mortgage credit institution may enter into one or more contracts the purpose or effect of which is to reduce or minimise the risk of financial loss or exposure liable to arise from -

(a) fluctuations in interest rates or currency exchange rates,

(b) credit risks, or

(c) other risk factors that may adversely affect its permitted business activities.

(2) The Authority may, by regulatory notice published in Iris Oifigiúil, specify for the purpose of this section requirements as to -

(a) the kind of contracts that a designated mortgage credit institution may enter into under subsection (1), and

(b) the terms and conditions under which those contracts, or any class of those contracts, may be entered into (including those relating to pool hedge collateral).

(3) If a contract of a kind referred to in subsection (1) relates only to -

(a) mortgage covered securities issued by a designated mortgage credit institution,