Instructions for completion of Form M5
1. Units must be the same as those used in Form M1.
2. Derivative contracts must be analysed according to the description of assets shown in the second column of Form M5 which represents the principal subject of the contract.
3. Derivative contracts must be reported as assets in column 1 of Form M5 if their value to the marine mutual (gross of variation margin) is positive and as liabilities in column 2 of Form M5 if their value to the marine mutual (gross of variation margin) is negative.
4. All amounts included at lines 11 to 35 of Form M5 in respect of derivative contracts are to be determined without making any allowance for variation margin.
5. Amounts in respect of a derivative contract may only be included net of amounts in respect of any other derivative contract if -
(a) obligations of the marine mutual under the contracts may be set off against each other under generally accepted accounting practice; and
(b) such other contract has the effect (in whole or in part) of closing out the obligations of the marine mutual under the first mentioned contract.
6. The effect of any variation margin upon amounts included at lines 11 to 35 of Form M5 must be shown at line 41.
7. The entry at M5.49.1 must be shown at M3.44.1.
8. The entry at M5.49.2 must be included at M2.23.1.
9. Rights to recover assets transferred by way of initial margin must not be shown on Form M5.