Hedge fund/proprietary trader

Revision as of 11:36, 18 January 2020 by Amwelladmin (talk | contribs)

One of ISDA’s vaunted netting categories.

Hedge fund/proprietary trader: A legal entity, which may be organized as a corporation, partnership or in some other legal form, the principal business of which is to deal in and/or manage securities and/or other financial instruments and/or otherwise to carry on an investment business predominantly or exclusively as principal for its own account.

You may see this category excluded from netting opinions in jurisdictions where you might expect to see it — (Ireland, for example. This is likely to be because a “hedge fund” or a “proprietary trader” is not recognised as a discrete and meaningful category of legal entity in that jurisdiction — rather, it will count as a corporation or an investment fund — rather than because entities in that jurisdiction which happen to be hedge funds can’t net.

See also