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Hedge Clause

What is 'Hedge Clause'

A provision included in published financial reports that indemnifies the author, or authors, against any responsibility for any errors, omissions, or oversights contained within the report. Hedge clauses can be found predominately in analyst reports, company press releases and on most investing websites.

A hedge clause is also known as a "disclaimer".

Explaining 'Hedge Clause'

Investors will find hedge clauses in nearly every financial report published today, and even though they are often glossed over, they are very important for investors to read and understand.

One example is the "safe harbor" provision found in most company press releases. Potential conflicts of interest from, for example, a stock analyst writing a recommendation for one of his own holdings, must also be included in the hedge clause for that report.


Further Reading


Economic exposure to exchange rate risk and financial hedging
www.emerald.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Natural hedging as a risk prophylaxis and supplier financing instrument in automotive supply chainsNatural hedging as a risk prophylaxis and supplier financing instrument in automotive supply chains
www.emerald.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Hedge funds and the collapse of long-term capital managementHedge funds and the collapse of long-term capital management
www.aeaweb.org [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Is cash negative debt? A hedging perspective on corporate financial policiesIs cash negative debt? A hedging perspective on corporate financial policies
www.sciencedirect.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

The economics of hedge fundsThe economics of hedge funds
www.sciencedirect.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Hedge funds: Past, present, and futureHedge funds: Past, present, and future
www.aeaweb.org [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Overview and Regulation of Hedge FundsOverview and Regulation of Hedge Funds
search.proquest.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Foreign currency risk hedgingForeign currency risk hedging
search.proquest.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …

Risk management for air freight forwarders: Analysis of flexible price agreements and financial hedgingRisk management for air freight forwarders: Analysis of flexible price agreements and financial hedging
www.tandfonline.com [PDF]
… sign predicted by the theory which confirms that firms with lower liquidity hedge more and … be explained by the fact that if highly levered firms are not fully hedged, the exposure of … of foreign exchange transactions, separate details of cost side and revenue side hedges and hedge …



Q&A About Hedge Clause


Where can you find hedge clauses?

You can find them in analyst reports, company press releases and on most investing websites.

What does a hedge clause protect against?

Hedge clauses protect against errors and oversights.

When was this law passed?

This law was passed during World War II in order to protect investors from fraudulent practices by investment advisers who were trying to make money off war bonds and other financial instruments issued by the government at that time.

Who are protected by this law?

Investors are protected under this act, which requires all federally registered investment advisers to register with the Securities Exchange Commission (SEC). It also requires them to disclose all fees charged for their services as well as any conflicts of interest they may have with their clients' investments. In addition, they must provide full disclosure about any securities they sell or recommend for sale and must abide by a fiduciary standard when dealing with their clients' assets . If these requirements are not met, then federal regulators can take action against them . These requirements apply equally whether you are working with an individual adviser or a large financial institution .

What does the term "Hedge Clause" refer to?

The term "Hedge Clause" refers to an investment contract that gives a party (the investor) the right to terminate or modify it if certain events occur.

Who are the parties involved with hedge clauses?

The parties include investors and analysts/author(s).

How do investors benefit from reading these clauses?

Investors will be able to understand potential conflicts of interest from stock analysts writing about their own holdings.

How do you know if your adviser has been registered with SEC ?

You can check online at www . sec . gov / advisorsearch / searchadviserinfoform . htm , where you will find information about every SEC -registered investment adviser in America , including contact information for each

What is the name of the law that regulates hedge clauses in investments?

The Investment Advisers Act of 194.

What is a hedge clause?

A hedge clause is a provision included in published financial reports that indemnifies the author, or authors, against any responsibility for any errors, omissions, or oversights contained within the report.

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