Version date: 14 March 2018 - onwards
  Version 9 of 9    

iv. Financial derivative instruments

1. Where the Retail Investor AIF engages in transactions in FDIs, whether such transactions are for investment purposes or for hedging purposes, it must comply with this section 1.iv. Paragraphs 18 to 22 of this section (Calculation of global exposure) in relation to the calculation of global exposure are also applicable where a Retail Investor AIF engages in repurchase/reverse repurchase agreements ("repo contracts") through which additional leverage is generated through the re-investment of collateral.

2. Subject to paragraph 3 below, the Retail Investor AIF shall only engage in transactions in financial derivative instruments, where those instruments are dealt on a market which is regulated, operating regularly, recognised and open to the public in a Member State or non-Member State.

3. The Retail Investor AIF may invest in FDI dealt in over-the-counter ("OTC derivatives") provided that:

(a) the counterparty is a relevant institution or an investment firm, authorised in accordance w