(12)To ensure fair treatment of investors and to mitigate the dilution effects caused by transaction costs arising from subscribing or redeeming investors, an AIFM that makes use of swing pricing should have the right to adjust the net asset value of the units or shares of the AIF it manages on each dealing date (commonly referred to as ‘full swing’) or only when the net subscriptions or redemptions are greater than a predetermined threshold (commonly referred to as ‘partial swing’). Under both types of swing pricing, the direction of the swing (i.e., whether the swing factor is added to or deducted from the net asset value of units or shares of the AIF) is determined by the net capital activity of the dealing date. Therefore, for a given dealing date with net subscriptions, the swing factor should be added to the net asset value of the units or shares of the AIF that will be adjusted upward. In the opposite scenario, for a given dealing date with net redemptions, a swing factor should be deducted from the net asset value of the units or shares of the AIF that will be adjusted downward. To ensure fair treatment of investors and facilitate the use of swing pricing under both normal and stressed market conditions, under both types of swing pricing the AIFM should be able to decide to have either a single swing factor or to apply swing factors depending on the size of net capital activity (commonly referred to as ‘tiered approach’) or to apply other possibilities, including mixed approaches.