The State’s counterparties are mostly the 20 primary dealers, which include some of the leading players on global bond markets.

The financial solidity of these institutions is one ofthe criteria for their selection. In addition, market agreements under French law have beennegotiated in order to circumscribe the risk of default as far as possible.

They provide for daily margin calls on transactions in financial futures and repos. Repos are doubly safe, since they are secured not only by the transfer of securities which remain in the State’s possession if the counterparty defaults but also by margin calls which adjust the value of the securities on a daily basis.

AFT’s internal procedural manual also sets risk limits defined according to the counterparty’s size and credit rating.

All operations under these procedures are covered by the audit carried out each year by external auditors.