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Neutralizing effects of hybrid mismatch arrangementsintended to be covered (it would seem at least some are). Further, this isnot to suggest that the OECD Public Discussion Draft on BEPS Action2 — Domestic Issues intends to cover all mismatches that fall withinthese categories and, also, the OECD examples are essentially limitedto secondary mismatches as regards payments. Moreover, the OECDexamples are largely limited to mismatches in characterization of a paymentand allocation of maker and recipient. 37 The OECD examples arefurther analysed in annex II to the present chapter.2.2 Hybrid financial instruments and transfersA primary focus of the OECD is on mismatches in the character of apayment made under “financial instruments.” The OECD Action2 — 2014 Deliverable and OECD Public Discussion Draft on BEPSAction 2 — Domestic Issues cover both pure mismatches in the characterof a payment (even where there is no mismatch in the characterof the asset with respect to which the payment is made) as well as suchmismatches that are triggered by a mismatch in the character of theunderlying asset. 38 The former is apparently covered despite no examplebeing dedicated to it, that is to say, all OECD examples of mismatches incharacterizing a payment are triggered by other mismatches, such as thecharacter of a financial instrument or allocation of its owner.While “financial instrument” seems a limiting factor in theOECD Action 2 — 2014 Deliverable and OECD Public Discussion Drafton BEPS Action 2 — Domestic Issues, there is no effective definition ofthe phrase. The latter recommends that this be determined by referenceto domestic law. 39 The OECD Action 2 — 2014 Deliverable defines“financial instrument” to include “an arrangement taxed under therules for taxing debt, equity or derivatives under the laws of the payee37Amanda Athanasiou, “OECD’s Hybrid Mismatch Proposals Too Drastic,Commentators Say,” (2012) Vol. 94, No.1 Worldwide Tax Daily, notes thatthe OECD Business and Industry Advisory Committee considers “the rulesare both broad and underinclusive.”38Compare examples 6 and 10 above with figures 1 and 19 in the OECDPublic Discussion Draft on BEPS Action 2 — Domestic Issues, supra note 2,19 and 73.39Ibid., note 2, 25.217