Regulatory Alerts2022-12-07
Conduct Standard on Conditions for Investment in Derivative Instruments by Pension Funds
The Financial Sector Conduct Authority has finalized a consultation report establishing new conditions for pension funds to invest in derivative instruments under the Financial Sector Regulation Act. The standard permits covered long and short positions, clarifies collateral eligibility, and replaces the rigid 25 percent value limit with a principles-based disclosure regime to support hedging and efficient portfolio management. Additionally, the Authority granted a twelve-month transitional period to allow funds to update policies, align contracts, and implement necessary system enhancements for compliance.
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