Risk Management and Leverage Clause Samples
The 'Risk Management and Leverage' clause defines how parties identify, assess, and control risks associated with leveraging financial or operational resources within an agreement. It typically outlines procedures for monitoring exposure, setting limits on leverage ratios, and implementing safeguards such as collateral requirements or reporting obligations. By establishing clear guidelines for managing risk and the use of leverage, this clause helps prevent excessive risk-taking and protects both parties from potential financial instability or losses.
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Risk Management and Leverage. The Sub-Fund will use the modified commitment approach to accurately measure, monitor and manage the leverage effect produced by the use of derivatives. For further details please see section entitled "Risk Management" in the Prospectus. The Taxonomy Regulation is a piece of directly effective EU legislation that is applicable to the Sub-Fund. Its purpose is to establish a framework to facilitate sustainable investment. It sets out harmonised criteria for determining whether an economic activity qualifies as environmentally sustainable and outlines a range of disclosure obligations to enhance transparency and to provide for objective comparison of financial products regarding the proportion of their investments that contribute to environmentally sustainable economic activities. It is notable that the scope of environmentally sustainable economic activities, as prescribed in the Taxonomy Regulation, is narrower than the scope of sustainable investments under SFDR. Therefore, although there are disclosure requirements for both, these two concepts should be considered and assessed separately. This section addresses only the specific disclosure requirements of the Taxonomy Regulation. For further details on the Sub-Fund's approach to sustainability and its alignment with the promotion of environmental and/or social characteristics in accordance with SFDR, please refer to the section of the Prospectus entitled "Integration of ESG" and the ESG criteria as outlined in the Investment Strategy section above. The “do no significant harm” principle applies only to those investments underlying the Sub-Fund that take into account the EU criteria for environmentally sustainable economic activities. The Sub-Fund does not presently set a minimum proportion of underlying investments that should be considered Environmentally Sustainable Investments primarily due to the delay to the publication of the regulatory technical standards supplementing the Taxonomy Regulation. Accordingly, for the current purposes of the Taxonomy Regulation, it should be noted that the investments underlying the Sub-Fund might not take into account the EU criteria for environmentally sustainable economic activities.
Risk Management and Leverage. The Sub-Fund will use the modified commitment approach to accurately measure, monitor and manage the leverage effect produced by the use of derivatives. For further details please see section entitled "Risk Management" in the Prospectus.