Transfer: Difference between revisions
imported>Doug Williamson (Expand and add links. Souce: CertT Unit 5, Principles of hedging and Transferability of risks.) |
imported>Doug Williamson (Be explicit that this risk response is 'tranfer'.) |
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In relation to risk management, a response to risk in which another party is paid - or otherwise induced - to accept the risk. | In relation to risk management, a response to risk in which another party is paid - or otherwise induced - to accept the risk. | ||
The 'transfer' risk response includes both insurance and 100% hedging of financial risks with fixing derivative instruments such as forward contracts. | |||
Revision as of 15:48, 30 May 2016
1.
The sending (or movement) of funds or securities or of a right relating to funds or securities from one party to another by:
i. The conveyance of physical instruments/money; or
ii. Accounting entries on the books of a financial intermediary; or
iii. Accounting entries processed through a funds and/or securities transfer system.
The act of transfer affects the legal rights of the transferor, transferee and possibly third parties in relation to the money balance, security or other financial instrument being transferred.
2.
In relation to risk management, a response to risk in which another party is paid - or otherwise induced - to accept the risk.
The 'transfer' risk response includes both insurance and 100% hedging of financial risks with fixing derivative instruments such as forward contracts.
