Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 763C

Meaning of manages financial risk

    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).


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