Basic hedging product a ppt

1. FOREIGN EXCHANGE RISK AND
HEDGING PRODUCTS

2. STARTERS
1. WHAT ARE VARIOUS TYPES OF RATES?
2. WHY DO RATES MOVE?
3. WHAT IS THE IMPACT?
4. WHAT ARE HEDGING PRODUCTS?
5. IS FOREX BUSINESS RISKY / PROFITABLE?
6. DO WE NEED THIS BUSINESS?
7. HOW DO WE IDENTIFY NEED (POTENTIAL)?
8. HOW DO WE ASSESS / MONITOR THE LIMITS?
9. WHAT CHECKS & BALANCES ARE NEEDED?
1. WHAT ARE VARIOUS TYPES OF RATES?
2. WHY DO RATES MOVE?
3. WHAT IS THE IMPACT?
4. WHAT ARE HEDGING PRODUCTS?
5. IS FOREX BUSINESS RISKY / PROFITABLE?
6. DO WE NEED THIS BUSINESS?
7. HOW DO WE IDENTIFY NEED (POTENTIAL)?
8. HOW DO WE ASSESS / MONITOR THE LIMITS?
9. WHAT CHECKS & BALANCES ARE NEEDED?

3. LEARNING TOPICS
1. PRODUCTS
2. RBI GUIDELINES
3. BANK GUIDELINES
A. ASSESSMENT OF LIMITS
B. MONITORING
C. DOCUMENTATION
D. ISSUES
1. PRODUCTS
2. RBI GUIDELINES
3. BANK GUIDELINES
A. ASSESSMENT OF LIMITS
B. MONITORING
C. DOCUMENTATION
D. ISSUES

4. COMMON EXPOSURES
• EXPORTS / IMPORTS
• FCNRB LOANS
• PCFC/EBR
• TRADE CREDITS
– BUYER’S CREDIT
– SUPPLIER’S CREDIT
• EXTERNAL COMMERCIAL BORROWINGS (ECB)
• FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
• ANY OTHER EXPOSURE TO INTEREST RATES /
CURRENCIES
• EXPORTS / IMPORTS
• INWARD / OUTWARD REMITTANCES
• FCNRB LOANS
• PCFC/EBR
• TRADE CREDITS
– BUYER’S CREDIT
– SUPPLIER’S CREDIT
• EXTERNAL COMMERCIAL BORROWINGS (ECB)
• FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
• FOREIGN CURRENCY EXCHANGEABLE BONDS
(FCEB)
• ANY OTHER EXPOSURE TO INTEREST RATES /
CURRENCIES
• EXPORTS / IMPORTS
• FCNRB LOANS
• PCFC/EBR
• TRADE CREDITS
– BUYER’S CREDIT
– SUPPLIER’S CREDIT
• EXTERNAL COMMERCIAL BORROWINGS (ECB)
• FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
• ANY OTHER EXPOSURE TO INTEREST RATES /
CURRENCIES
POTENTIAL IDENTIFICATION.ppt
• EXPORTS / IMPORTS
• INWARD / OUTWARD REMITTANCES
• FCNRB LOANS
• PCFC/EBR
• TRADE CREDITS
– BUYER’S CREDIT
– SUPPLIER’S CREDIT
• EXTERNAL COMMERCIAL BORROWINGS (ECB)
• FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
• FOREIGN CURRENCY EXCHANGEABLE BONDS
(FCEB)
• ANY OTHER EXPOSURE TO INTEREST RATES /
CURRENCIES

5. 24 hour Market
Mumbai
New YorkBahrain
Frankfurt
Zurich
London
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Tokyo
HK
Singapore
Mumbai Los Angeles
Sydney Sydney

6. RUPEE

7. USD 6-M LIBOR

8. INR-SENSEX

9. RISK & IMPACT
• TYPES:
– CURRENCY RISK OR EXCHANGE-RATE RISK
– INTEREST RATE RISK
• IMPACT:
– THE UNCERTAINTY OVER THE ULTIMATE
COSTS LEADS TO INEFFICIENT PRICING
ESPECIALLY IN A COMPETITIVE ENVIRONMENT
• RESULT:
• SUDDEN CHANGES IN CASH FLOW
• PROJECT COST ESCALATION
• LOSS OF BUSINESS ETC.
• TYPES:
– CURRENCY RISK OR EXCHANGE-RATE RISK
– INTEREST RATE RISK
• IMPACT:
– THE UNCERTAINTY OVER THE ULTIMATE
COSTS LEADS TO INEFFICIENT PRICING
ESPECIALLY IN A COMPETITIVE ENVIRONMENT
• RESULT:
• SUDDEN CHANGES IN CASH FLOW
• PROJECT COST ESCALATION
• LOSS OF BUSINESS ETC.

10. RISK-HEDGING
o FACTS
o RETURN IS A FUNCTION OF RISK- NO RISK NO REWARD
o A “HEDGE” IS A WAY OF TRANSFORMING RISK NOT
ELIMINATING
o HEDGING INVARIABLY INVOLVES VIEW TAKING
o EVERYBODY DOES NOT HAVE THE SAME INFORMATION
o PROBABILITY IS GOOD THEORY BUT DOES NOT REPLACE
REAL LIFE
o NOTHING COMES FREE – EXCEPT RISK
o FACTS
o RETURN IS A FUNCTION OF RISK- NO RISK NO REWARD
o A “HEDGE” IS A WAY OF TRANSFORMING RISK NOT
ELIMINATING
o HEDGING INVARIABLY INVOLVES VIEW TAKING
o EVERYBODY DOES NOT HAVE THE SAME INFORMATION
o PROBABILITY IS GOOD THEORY BUT DOES NOT REPLACE
REAL LIFE
o NOTHING COMES FREE – EXCEPT RISK

11. DERIVATIVES
HEDGING TOOLS

12. PRODUCTSPRODUCTS

13. DERIVATIVES
FINANCIAL INSTRUMENTS WHOSE VALUE/ PAY OFF IS
DERIVED FROM VALUE OF AN UNDERLYING ASSET.
COMMON DERIVATIVE
PRODUCTS
FORWARD CONTRACTS
-USD/INR, CROSS, THIRD
COMMON UNDERLYING
ASSETS
COMMODITIES
FORWARD CONTRACTS
-USD/INR, CROSS, THIRD
OPTIONS
-PUT, CALL & COMBINATIONS
SWAPS
-PRINCIPAL, INTEREST & BOTH
FUTURES
-CURRENCY, EQUITY
COMMODITIES
FOREIGN EXCHANGE (ASSETS
& LIABILITIES AND REVENUE
FLOWS)
INTEREST RATES
EQUITY SHARES

14. FORWARD CONTRACTSFORWARD CONTRACTS

15. Value Date - Time Scale
Time Scale
Cash Tom Spot Forward Maturities
Cash Deal is done today for delivery Today
Tom Deal is done today for delivery Tomorrow
Spot Deal is done today for delivery on 2nd Business Day
Forward Deal is done today for delivery beyond Spot Date

16. FORWARD CONTRACTS
• A CONTRACT TO BUY OR SELL A SPECIFIED AMOUNT
OF CURRENCY AT A SPECIFIED PRICE FOR A SPECIFIC
FUTURE DATE.
• BOTH A RIGHT AND AN OBLIGATION TO BUY OR SELL
• ADVANTAGE:
– SIMPLE , LIQUID , TRANSPARENT
– REQUIRES NO OUTLAY OF FUNDS UPFRONT.
– WINDOW OPTION OF 30 DAYS
• DISADVANTAGE:
– NO PARTICIPATION IN MARKET VOLATILITY
– PROFIT AND LOSS ONLY CRYSTALLIZED ON DUE DATE
– OPPORTUNITY PROFIT / OPPORTUNITY LOSS UNLIMITED
• A CONTRACT TO BUY OR SELL A SPECIFIED AMOUNT
OF CURRENCY AT A SPECIFIED PRICE FOR A SPECIFIC
FUTURE DATE.
• BOTH A RIGHT AND AN OBLIGATION TO BUY OR SELL
• ADVANTAGE:
– SIMPLE , LIQUID , TRANSPARENT
– REQUIRES NO OUTLAY OF FUNDS UPFRONT.
– WINDOW OPTION OF 30 DAYS
• DISADVANTAGE:
– NO PARTICIPATION IN MARKET VOLATILITY
– PROFIT AND LOSS ONLY CRYSTALLIZED ON DUE DATE
– OPPORTUNITY PROFIT / OPPORTUNITY LOSS UNLIMITED

17. FORWARD CONTRACTS
EXPORTER: SPOT: 50.00 + 3M FWD 0.50 Ps
RIGHT:
PROTECTED RANGE
47.50 51.5050.50
RIGHT:
PROTECTED RANGE
OBLIGATION:
OPPORTUNITY LOSS RANGE

18. • Rate Calculation:
– Exports/Imports Bid / Ask
– Cash/Tom/Spot
• Forward Rates
– Example: Spot Rate:50.50/51
FORWARD CONTRACTS
• Rate Calculation:
– Exports/Imports Bid / Ask
– Cash/Tom/Spot
• Forward Rates
– Example: Spot Rate:50.50/51
PERIOD PREMIUM FWD. RATE
1 MONTH 0.30/0.31 50.30/50.32
2 MONTHS 0.40/0.41 50.40/50.42
3 MONTHS 0.50/0.51 50.50/50.52

19. FORWARD CONTRACTS
• IMPORTANT OPERATIONAL GUIDELINES:
– CANCELLATIONS:
• PROFIT/LOSS PASSED ON TO THE CUSTOMER (PROFIT WILL BE
PASED ON ONLY IF BOOKED UNDER DE METHOD)
• CANCELLATION TO BE DONE ON OR BEFORE DUE DATE.
– ELSE PROFIT NOT GIVEN TO THE CUSTOMER BUT LOSS PASSED
ON
• FOR EARLY CANCELLATIONS OPTION TO RECEIVE PROFIT AT
DISCOUNTED RATE (PLR). LOSS TO BE DEBITED IMMEDIATELY.
• OVERDUE CONTRACTS MUST BE CANCELLED WITH IN 3 DAYS.
AT CARD RATES.(FEDAI clarification dated 12/03/2013)
• PERIOD IS ALLOWED FOR BANK TO COMPLETE PROCESS NOT
FOR CUSTOMER TO WAIT FOR RATE ADVANTAGE.
**
• IMPORTANT OPERATIONAL GUIDELINES:
– CANCELLATIONS:
• PROFIT/LOSS PASSED ON TO THE CUSTOMER (PROFIT WILL BE
PASED ON ONLY IF BOOKED UNDER DE METHOD)
• CANCELLATION TO BE DONE ON OR BEFORE DUE DATE.
– ELSE PROFIT NOT GIVEN TO THE CUSTOMER BUT LOSS PASSED
ON
• FOR EARLY CANCELLATIONS OPTION TO RECEIVE PROFIT AT
DISCOUNTED RATE (PLR). LOSS TO BE DEBITED IMMEDIATELY.
• OVERDUE CONTRACTS MUST BE CANCELLED WITH IN 3 DAYS.
AT CARD RATES.(FEDAI clarification dated 12/03/2013)
• PERIOD IS ALLOWED FOR BANK TO COMPLETE PROCESS NOT
FOR CUSTOMER TO WAIT FOR RATE ADVANTAGE.
**

20. OPTIONSOPTIONS

21. OPTIONS
A CONTRACT WHEREBY THE BUYER ACQUIRES RIGHT BUT NOT
OBLIGATION TO PURCHASE/ SELL A SPECIFIED ASSET AT A
PREDETERMINED PRICE ON A SPECIFIED DATE. ( EUROPEAN
OPTION)
• ADVANTAGE:
– OPPORTUNITY PROFIT UNLIMITED
– OPPORTUNITY LOSS LIMITED TO THE PREMIUM PAID
• DISADVANTAGE:
– PRICING LESS TRANSPARENT THAN FORWARD.
FACTOR OF A) SPOT B) STRIKE C) MATURITY D) INT. DIFF E) VOLATILITY
– UPFRONTPREMIUM PAYMENT(RBI has allowed for staggered pa.
– SPECIFIC DATE MATURITY- NOWINDOW OPTION
A CONTRACT WHEREBY THE BUYER ACQUIRES RIGHT BUT NOT
OBLIGATION TO PURCHASE/ SELL A SPECIFIED ASSET AT A
PREDETERMINED PRICE ON A SPECIFIED DATE. ( EUROPEAN
OPTION)
• ADVANTAGE:
– OPPORTUNITY PROFIT UNLIMITED
– OPPORTUNITY LOSS LIMITED TO THE PREMIUM PAID
• DISADVANTAGE:
– PRICING LESS TRANSPARENT THAN FORWARD.
FACTOR OF A) SPOT B) STRIKE C) MATURITY D) INT. DIFF E) VOLATILITY
– UPFRONTPREMIUM PAYMENT(RBI has allowed for staggered pa.
– SPECIFIC DATE MATURITY- NOWINDOW OPTION

22. OPTION
RIGHT:
PROTECTED RANGE
EXPORTER: SPOT: 50.00 + 3M FWD 0.50 Ps
47.50
51.5050.50
ATM
1.00
RIGHT:
PROTECTED RANGE
NO OBLIGATION:
OPPORTUNITY PROFIT
RANGE

23. OPTIONS- GLOSSARY
• CALL OPTION
• PUT OPTION
• OPTION BUYER
• OPTION SELLER
• EXPIRATION
• STRIKE RATE
• PREMIUM
• IN THE MONEY
• OUT OF MONEY
• AT THE MONEY
• AMERICAN OPTION
• EUROPEAN OPTION
• BARRIERS
• CALL OPTION
• PUT OPTION
• OPTION BUYER
• OPTION SELLER
• EXPIRATION
• STRIKE RATE
• PREMIUM
• IN THE MONEY
• OUT OF MONEY
• AT THE MONEY
• AMERICAN OPTION
• EUROPEAN OPTION
• BARRIERS

24. OPTIONS
CALL PUT
BUYER RIGHT BUT NOT
OBLIGATION TO
BUY
RIGHT BUT NOT
OBLIGATION TO
SELL
RIGHT BUT NOT
OBLIGATION TO
BUY
RIGHT BUT NOT
OBLIGATION TO
SELL
SELLER POTENTIAL
OBLIGATION TO
SELL
POTENTIAL
OBLIGATION TO
BUY

25. HOW TO CHOOSE?
V
I
E
W
IMPORTERS
CONFIDENCE
HIGH LOW
USD
FIRMING
FORWARD
RATE TO BE
LOCKED IN
BUY AN USD
CALL
OPTION
USD FALLING KEEP THE
EXPOSURE
OPEN
BUY AN USD
CALL
OPTION
V
I
E
W
IMPORTERS
CONFIDENCE
HIGH LOW
USD
FIRMING
FORWARD
RATE TO BE
LOCKED IN
BUY AN USD
CALL
OPTION
USD FALLING KEEP THE
EXPOSURE
OPEN
BUY AN USD
CALL
OPTION

26. HOW TO CHOOSE?
V
I
E
W
EXPORTERS
CONFIDENCE
HIGH LOW
USD
FIRMING
KEEP THE
EXPOSURE
OPEN
BUY USD
PUT OPTION
USD FALLING FORWARD
RATE TO BE
LOCKED IN
BUY USD
PUT OPTION
V
I
E
W
EXPORTERS
CONFIDENCE
HIGH LOW
USD
FIRMING
KEEP THE
EXPOSURE
OPEN
BUY USD
PUT OPTION
USD FALLING FORWARD
RATE TO BE
LOCKED IN
BUY USD
PUT OPTION

27. OPTION- VARIETIES
RANGE FORWARD
RIGHT:
PROTECTED
RANGE
NO RIGHT & NO
OBLIGATION
RANGE-OPEN
Sell Call
48.00
50.00
52.50
51.00
50.50
ATM
RIGHT:
PROTECTED
RANGE
OBLIGATION:
OPPORTUNITY
LOSS RANGE
NO RIGHT & NO
OBLIGATION
RANGE-OPEN
Buy
Put

28. OPTION-VARIETIES
+0.50
SEA GULL
RIGHT:
PROTECTED
RANGE
NO RIGHT & NO
OBLIGATION
RANGE-OPEN
RIGHT &
OBLIGATION
RANGE
48
50.25
52
51.0049.75
+0.50
50.50
ATM
OBLIGATION:
OPPORTUNITY
LOSS RANGE

29. SWAPS
• SWAP IS A CONTRACTUAL AGREEMENT TO EXCHANGE
SPECIFIED CASH FLOWS AT FUTURE DATES
• WITHOUT ALTERING THE EXPOSURE, RIGHTS AND OBLIGATIONS ARE
EXCHANGED
• IN CASE OF AMORTISATION WORKS AS MULTIPLE FORWARD
CONTRACTS
• KEY USES:
– COST SAVING OR YIELD ENHANCEMENT ON EXISTING EXPOSURE
– HEDGING OF EXISTING RISK
– MECHANISM TO ACCESS THE BENEFITS AVAILABLE IN THE
MARKETS WHICH ARE OTHERWISE CLOSED TO THEM
– ALTERING THE NATURE OF ASSET OR LIABILITY SYNTHETICALLY
WITHOUT ANY CHANGE IN THE UNDERLYING.
• SWAP IS A CONTRACTUAL AGREEMENT TO EXCHANGE
SPECIFIED CASH FLOWS AT FUTURE DATES
• WITHOUT ALTERING THE EXPOSURE, RIGHTS AND OBLIGATIONS ARE
EXCHANGED
• IN CASE OF AMORTISATION WORKS AS MULTIPLE FORWARD
CONTRACTS
• KEY USES:
– COST SAVING OR YIELD ENHANCEMENT ON EXISTING EXPOSURE
– HEDGING OF EXISTING RISK
– MECHANISM TO ACCESS THE BENEFITS AVAILABLE IN THE
MARKETS WHICH ARE OTHERWISE CLOSED TO THEM
– ALTERING THE NATURE OF ASSET OR LIABILITY SYNTHETICALLY
WITHOUT ANY CHANGE IN THE UNDERLYING.

30. USD Cash Flows
USD
Liability
PRINCIPAL ONLY SWAP
Bank A Corporate
INR Cash Flows @ spot
(pays premium x%)

31. Bank
Bank Pays
Floating Interest Rate
6mL(1.60)+300
INTEREST RATE SWAP
Bank
Corp Pays
Fixed $ Interest Rate
5.40%
Corporate

32. USD Cash Flows
USD Liability
(FCL)
CIRS
Pays Floating Interest Rate (L+300)
INR Cash Flows @ spot
Corp Pays
Rs Fixed Interest Rate
11.95%
BANK CORPORATE
USD loan converted into a INR loan synthetically

33. GUIDELINES
1. Comprehensive Guidelines on derivatives: Modifications:RBI Circular
02 Nov 2011
2. RBI Circular: 15 Dec 2011:limit reduced to 25% for importers on past
performance basis
3. RBI Circular 13 Jan 2014:100% Cancellation and rebooking allowed for
current account transactions( if contract booked under D.E.)
4. FEDAI Clarification :
• FC booked in respect of all current account transaction irrespective of
tenor can be cancelled and rebooked freely.
• FC booked in case of capital account transaction where the residual
maturity of underlying is less than one year can be freely cancelled and
rebooked
• RBI Circular :18 June 2013: Deferment of option premium is allowed.
• RBI: 15.01.2014 :Monitoring of Un-hedged FC exposure : Provisioning
1. Comprehensive Guidelines on derivatives: Modifications:RBI Circular
02 Nov 2011
2. RBI Circular: 15 Dec 2011:limit reduced to 25% for importers on past
performance basis
3. RBI Circular 13 Jan 2014:100% Cancellation and rebooking allowed for
current account transactions( if contract booked under D.E.)
4. FEDAI Clarification :
• FC booked in respect of all current account transaction irrespective of
tenor can be cancelled and rebooked freely.
• FC booked in case of capital account transaction where the residual
maturity of underlying is less than one year can be freely cancelled and
rebooked
• RBI Circular :18 June 2013: Deferment of option premium is allowed.
• RBI: 15.01.2014 :Monitoring of Un-hedged FC exposure : Provisioning

34. GENERAL GUIDELINES
CUSTOMER SHOULD HAVE:
BOARD APPROVAL
RISK POLICY & PROCEDURES
BALANCE SHEET EXPOSURES
SIZE AND TENOR
UNDERSTANDING OF RISKS
NO ENHANCEMENT OF RISK PROFILE
PROPER LIMITS IN PLACE
CUSTOMER APPROPRIATENESS
CUSTOMER SHOULD HAVE:
BOARD APPROVAL
RISK POLICY & PROCEDURES
BALANCE SHEET EXPOSURES
SIZE AND TENOR
UNDERSTANDING OF RISKS
NO ENHANCEMENT OF RISK PROFILE
PROPER LIMITS IN PLACE
CUSTOMER APPROPRIATENESS
CAS & MARGIN MATRIX.ppt

35. PAST PERFORMANCE DOCUMENTARY EVIDENCE
BOOKING ON DECLARATION BOOKING ON PRODUCTION OF
UNDERLYING(15 DAYS TIME
ALLOWED FOR PRODUCTION OF
UNDERLYING)
SEPARATE LIMITS FOR EXPORTS AND
IMPORTS(reduced to 25%)
CAN BE CANCELLED AND REBOOKED
WITHOUT RESTRICTIONS
CONTRACTS BOOKED >75% OF LIMIT
ONLY ON DELIVERY BASIS AND
CANNOT BE CANCELLED
SIZE AND TENOR OF CONTRACT NOT
TO EXCEED UNDERLYING.
CONDUCT
CONTRACTS BOOKED >75% OF LIMIT
ONLY ON DELIVERY BASIS AND
CANNOT BE CANCELLED
SIZE AND TENOR OF CONTRACT NOT
TO EXCEED UNDERLYING.
PERIODIC CERTIFICATION
ANNUAL ; >50% LIMIT; EVIDENCE
BEFORE MATURITY/CANCELLATION
PROFIT WILL BE PASSED ON
CANCELLATION (ON OR BEFORE DUE
DATE)
AGGREGATE BOOKED DURING THE
YEAR AND OUTSTANDING AT ANY
TIME NOT TO EXCEED LIMIT
IF CANCELLED PROFIT WILL NOT BE
PASSED ON

36. SME-LIBERALISATION
• SME’S HAVING DIRECT AND / OR INDIRECT EXPOSURES
TO FOREIGN EXCHANGE RISK ARE PERMITTED TO BOOK
/ CANCEL / REBOOK FORWARD CONTRACTS WITHOUT
PRODUCTION OF UNDERLYING DOCUMENTS SUBJECT
TO :
– THE ENTITY SHOULD QUALIFY AS SME AS DEFINED BY RBI.
(ME >5-10 & >2-5CR )(SE <5 &<2CR)
– CONTRACTS CAN BE BOOKED THROUGH AD’S WITH WHOM THE
SME’S HAVE CREDIT FACILITIES.
– THE TOTAL FORWARD CONTRACTS BOOKED SHOULD BE IN
ALIGNMENT WITH CREDIT FACILITIES AVAILED BY THEM.
– SME’S ARE ALSO PERMITTED TO USE FOREIGN CURRENCY
RUPEE OPTIONS FOR HEDGING THEIR EXPOSURES AFTER
PRODUCTION OF UNDERLYING DOCUMENTS OR UNDER PAST
PERFORMANCE ROUTE.
– CAS NEEDS TO BE APPROVED **
• SME’S HAVING DIRECT AND / OR INDIRECT EXPOSURES
TO FOREIGN EXCHANGE RISK ARE PERMITTED TO BOOK
/ CANCEL / REBOOK FORWARD CONTRACTS WITHOUT
PRODUCTION OF UNDERLYING DOCUMENTS SUBJECT
TO :
– THE ENTITY SHOULD QUALIFY AS SME AS DEFINED BY RBI.
(ME >5-10 & >2-5CR )(SE <5 &<2CR)
– CONTRACTS CAN BE BOOKED THROUGH AD’S WITH WHOM THE
SME’S HAVE CREDIT FACILITIES.
– THE TOTAL FORWARD CONTRACTS BOOKED SHOULD BE IN
ALIGNMENT WITH CREDIT FACILITIES AVAILED BY THEM.
– SME’S ARE ALSO PERMITTED TO USE FOREIGN CURRENCY
RUPEE OPTIONS FOR HEDGING THEIR EXPOSURES AFTER
PRODUCTION OF UNDERLYING DOCUMENTS OR UNDER PAST
PERFORMANCE ROUTE.
– CAS NEEDS TO BE APPROVED **