A timely updating of the only accessible single volume guide to the ISDA Credit Support Annexes, sanctioned under English and US law. The Annexes collateralise or secure over the counter derivatives risk exposure. This is the companion book to Mastering the ISDA Master Agreements, now in its third edition.
First published in 2002, the book is a guide to negotiation of the two main ISDA Credit Support Annexes which are used to support the ISDA Master Agreements. The ISDA Credit Support Annexes are the main support documents which relate to collateralised or secure over the counter derivatives risk exposure.
This book covers collateral management from an operational perspective and focuses on the two main ISDA Credit Support Documents. It provides a clear concise narrative on their provisions and amendments
Table of Contents:
About the authors
Disclaimer
Acknowledgements
Authors’ foreword
1 Introduction
Definition of terms
Why collateral is taken
Types of collateral
Product risk exposure covered
Evolution of collateral documentation
2 Collateral management from a European perspective
Some facts and figures
What collateral management units do
The importance of policies and procedures
Setting up the collateral relationship
Exposure monitoring and collateral valuation and calling
Transfers
Reuse of collateral
Collateral substitutions
Distributions
Disputes
Portfolio reconciliations
Defaults
Branches
External collateral management services
3 Legal issues relating to collateral from the European and US perspectives
European perspective by Paul Harding
Introduction
General issues
Recharacterisation
Conflict of laws rules
The PRIMA rule
Other legal issues
ISDA collateral legal opinions
The European Directive on Financial Collateral Arrangements
Draft Hague Convention on indirectly held securities
Amending Directive to the Collateral Directive and Settlement
Finality Directive
Geneva Securities Convention
Collateralisation and central clearing counterparties
US perspective by Christian Johnson
Introduction
Enforcement of New York choice of law
Security interest creation and perfection
Exercising rights under the Security Agreement
Other issues
Other enforcement concerns
Dodd-Frank changes
4 Credit issues relating to collateral
Establishment of collateral management risk guidelines
Initial margin
Haircuts
Thresholds
Minimum Transfer Amounts
Eli
About the Author :
Paul C. Hardingisa graduate of London University and has worked in several UK and foreign banks in London in credit, marketing and documentation roles. Since 1990 he has been involved with derivatives documentation. He is the founder of Derivatives Documentation Limited, a derivatives consultancy and project management company providing negotiation, recruitment and in-house training services in derivatives documentation. He is the author of Mastering the ISDA Master Agreements and, Mastering Securities Lending Documentation.
