Hedging Mandate | Financial Glossary | Stable Payments

A hedging mandate is the formal authorisation or instruction given to a treasury team, broker, or financial institution to execute hedging transactions on behalf of a business within predefined limits.

It sits beneath the company’s hedging policy, outlining who can trade, what instruments can be used, and the level of discretion permitted. The goal is to ensure that all hedging activity aligns with the company’s risk appetite and governance standards.

Example:

A company board approves a hedging mandate allowing its finance director (or nominated FX broker) to fix up to £5 million in forward contracts for euro exposures, using approved counterparties and within agreed pricing tolerances.

Used in:

Corporate treasury operations, FX risk management, and governance frameworks to control authorised trading activity.