Canada Pension Plan Investment Board Regulations

14 (1) The Board shall not directly or indirectly hold or invest in a derivative where the market exposure of the Board under the derivative is not covered by cash or other assets of the Board designated for that purpose.

(2) The Board may hold or invest in a derivative if the purpose of the transaction is

• (a) to offset or reduce the risk associated with an existing investment or group of investments, or

• (b) to hold or invest in the derivative as an alternative to holding or investing in the underlying asset itself.