Document ID: chunk:federal_register_of_legislation:C2005C00498:clause:1_763c
Version: federal_register_of_legislation:C2005C00498
Segment Type: clause
Provision Reference: sch 1 cl 763C
Character Range: 49652–50461

763C  When a person manages financial risk

  For the purposes of this Chapter, a person manages financial risk if they:
 (a) manage the financial consequences to them of particular circumstances happening; or
 (b) avoid or limit the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices and interest rates).

Note 1: Examples of actions that constitute managing a financial risk are:

(a) taking out insurance; or

(b) hedging a liability by acquiring a futures contract or entering into a currency swap.

Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur).