Mastering ISDA Collateral Documents: A Practical Guide for Negotiators, 2nd Edition

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

Eligible collateral

Scope of collateralisation

Establishing policy for eligible collateral

Special counterparties

Sovereigns

Supranational entities

Hedge funds
Other duties

Risks

The Basel II Capital Accord
Position of collateralisation under Basel III

The future

5 The English Law ISDA Credit Support Annex

Paragraph by paragraph analysis

Glossary of terms in Paragraph 10

Examples of Paragraph 11 provisions

6 The New York Law ISDA Credit Support Annex

Paragraph by paragraph analysis

Glossary of terms in Paragraph 12

Examples of Paragraph 13 provisions

Comparison of the New York Law CSA with the English Law CSA

7 The ISDA English Law Credit Support Deed

Paragraph by paragraph summary of the English Law Credit Support Deed

Principal differences between the English Law CSA and the English Law Deed

ISDA Fallbacks for the English Law Credit Support Deed