DEFINITION of 'Hedge Clause'

A provision included in published financial reports that indemnifies the author, or authors, against any responsibility for any errors, omissions, or oversights contained within the report. Hedge clauses can be found predominately in analyst reports, company press releases and on most investing websites.

A hedge clause is also known as a "disclaimer".

BREAKING DOWN 'Hedge Clause'

Investors will find hedge clauses in nearly every financial report published today, and even though they are often glossed over, they are very important for investors to read and understand.

One example is the "safe harbor" provision found in most company press releases. Potential conflicts of interest from, for example, a stock analyst writing a recommendation for one of his own holdings, must also be included in the hedge clause for that report.

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RELATED FAQS
  1. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Answer >>
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    See why a privately arranged hedge fund may decide to take its fund public, and how the investing public at large can gain ... Read Answer >>
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