state of the market either regime a or regime b based on said determination the terms of the instrument would be used to calculate bidirectional cashflows and or accruals between one or more holders of the instrument and one or more issuers and or other counterparties e g underwriters 9 fisc 2 diversatives may be used to hedge against a risk that currently cannot be hedged against phase locking risk phase locking refers to the sudden shift from mostly uncorrelated to the nearly full correlation exhibited by many financial instruments and hedge funds during periods of market crisis for a discussion of phase locking and conditional correlation see u201c systemic risk and hedge funds u201d a paper by nicholas chan mila getmansky shane haas and andrew lo dated feb 22 2005 prepared for the nber conference on the risks to financial institutions 10 for example a fisc 2 diversative could combine a plain vanilla scores contract with an embedded option linked to a change in market regime in a preferred embodiment the option would entitle its holder to receive cashflows equivalent to selling one or more financial instruments at a price associated with the previous market regime e g last price before change of regime highest price in preceding n months average price of preceding n months etc 11 in an alternative preferred embodiment the change in market regime could convert the scores random payout features into an option like the one described above suspending the non correlated scores portion of the financial instrument and strengthening its negative correlation during the market crisis 12 a fisc n diversative with n gt 2 may preferably re convert into a non correlated type instrument after a second change in market regime the number of flips between market regimes need not be.