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When the PRC Futures and Derivatives Law comes into effect on 1 August 2022, China will become a “clean netting jurisdiction”.  Therefore, now is the time for Chinese companies and their international financial institution counterparties to actively focus on regulatory margin requirements for OTC derivatives and negotiate initial margin and variation margin documentation. 

Based on KWM’s extensive experience in assisting major international and Chinese financial institutions with margin documentation negotiations, this bilingual guide is designed to help Chinese companies gain a better understanding of the key initial margin documents used in the international market. 

I. Overview of regulatory margin requirements

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions have jointly published a set of global regulatory margin standards which require counterparties to OTC derivatives to post and collect initial margin and variation margin to and from each other.  To implement the global regulatory margin standards, most major jurisdictions have introduced their own local regulatory margin rules subject to some important jurisdiction-specific variations. 

Generally speaking, regulated financial institutions (such as banks) are directly subject to local regulatory margin rules issued by the relevant financial regulator(s).  These rules generally require the institution to both post and collect (i.e., exchange) variation margin and initial margin to and from certain types of counterparties. 

To comply with the regulatory requirement to exchange margin, a regulated financial institution will negotiate and enter into margin documents with each of its counterparties, which will impose contractual obligations on each side to exchange margin.  Therefore, even if a counterparty to a regulated financial institution is not directly subject to regulatory margin rules – either because i. it is not financially regulated or ii. the jurisdictions in which it operates has not yet issued local regulatory margin rules – the counterparty becomes indirectly and contractually subject to margin requirements by virtue of entering into margin documents with a regulated financial institution.  

Financial regulators in the People’s Republic of China (“China” or “PRC”) have not yet published local regulatory margin rules, but are expected to do so in the future.  However, Chinese financial institutions and general corporates would still be indirectly and contractually subject to margin requirements upon entering into margin documents with a foreign regulated financial institution. 

Please refer to our earlier bilingual article for further information about regulatory margin requirements, their scope of application (including cross-border application), the distinction between initial margin and variation margin, substituted compliance and other related topics. 

II. Overview of key initial margin documents

The International Swaps and Derivatives Association (“ISDA”) has developed a large number of industry standard margin documents that are designed to comply with initial margin requirements. 

The local regulatory margin rules in most jurisdictions generally require initial margin to be held in a segregated account and not to be rehypothecated, repledged or reused.  Initial margin should generally be held in an account with an independent third-party custodian which is segregated from the proprietary assets of the security-taker and custodian, and adequately protected from insolvency of the security-provider, security-taker and custodian.  This segregation requirement, which applies to initial margin (but not to variation margin) means that initial margin arrangements are documented separately to variation margin arrangements.  This article provides a high-level overview of the key initial margin documents.  We will cover variation margin documents in a subsequent article. 

ISDA has developed a wide range of standard initial margin documents designed to work with different types of custodians and governing laws.  For example, ISDA has developed initial margin documents for circumstances where the custodian is a bank and where the custodian is an international central securities depository such as Euroclear or Clearstream. 

Generally, the initial margin documents involve the “security-provider”[1] granting a security interest in favour of the “security-taker”[2] over collateral held by the independent third-party custodian (which can be a bank or a clearing house such as Euroclear or Clearstream). 

1. “Tri-party” or “third party” custodial services

Generally, custodians offer either “tri-party” or “third party”custodial services in respect of initial margin:

a) Tri-party” model

Under the tri-party services model, the custodian plays a more active role in collateral selection, valuation, verification, optimization and management, which means the security-provider and security-taker in turn play a more hands-off role and, from their perspective, the initial margin exchange process appears more automated.  Euroclear and Clearstream provide tri-party custodial services (but not third party services) in respect of initial margin. 

b) “Third party” model

In contrast, under the third-party services model, the custodian plays a more passive role, which means the security-provider and security-taker in turn play a more hands-on role in collateral selection, valuation, verification, optimization and management. 

The choice between tri-party and third party has implications for the initial margin documents and, where the custodian is a bank, the account control agreement. 

2. English law IM CSD and New York law IM CSA – for use with bank custodians

We generally see two types of “flagship” initial margin documents adopted in the market:

a) English law governed IM CSD

As far as the English law documents are concerned, ISDA’s “flagship” initial margin document is the 2018 Credit Support Deed (“CSD”) for Initial Margin (“IM CSD”).  The IM CSD is based on the ISDA 1995 English law CSD and is therefore a separate security document executed as a deed and not forming part of the ISDA Master Agreement.  Instead of relying on title transfer, the IM CSD involves creating a security interest over the segregated account and the collateral held in it.  Significantly, pursuant to regulatory margin requirements, initial margin must generally be transferred on a two-way gross basis, which means that each counterparty must transfer collateral to the other counterparty’s segregated account and these two separate transfer obligations cannot be netted or set off against each other.  

b) New York law governed IM CSA

As far as the New York law documents are concerned, ISDA’s “flagship” initial margin document is the 2018 Credit Support Annex (“CSA”) for Initial Margin (“IM CSA”).  The IM CSA is based on the ISDA 1994 New York law CSA and also involves creating a security interest over the segregated account and the collateral held in it.   In this article, the IM CSA and IM CSD shall be collectively referred to as the “IM CSA/CSD”.

The elections and variables paragraph of the IM CSA/CSD allows parties to make various elections and amendments to meet applicable commercial and regulatory requirements.  The most common types of elections are discussed further below. 

The IM CSA/CSD can be used where the security-provider will post initial margin to a segregated account held with a bank custodian.  The parties will also need to enter into an account control agreement and custody agreement.

Where the jurisdiction in which the bank custodian is located is different to the jurisdiction the laws which govern the ISDA Master Agreement between the parties, the parties may effectively “split” the IM CSA/CSD into a collateral transfer agreement and a security agreement, as explained below. 

3. Splitting the IM CSA/CSD into two: the collateral transfer agreement and the security agreement

ISDA has also published the Bank Custodian Collateral Transfer Agreement for initial margin and several Bank Custodian Security Agreements governed by the laws of different jurisdictions.  The Bank Custodian Collateral Transfer Agreement and Bank Custodian Security Agreement represent the two halves of the IM CSA/CSD:

i. the Bank Custodian Collateral Transfer Agreement governs the mechanical and operational aspects of the margin exchange process and is generally governed by the same governing law as the relevant ISDA Master Agreement; and

ii. the Bank Custodian Security Agreement relates to the creation and enforcement of the security interest and is governed by the law where the segregated account is located. 

The reason for splitting the IM CSA/CSD into a collateral transfer agreement and a security agreement is to allow the parties to enter into a security agreement the governing law jurisdiction of which matches the location of the segregated account, while allowing the collateral transfer agreement to be governed by the same governing law as the relevant ISDA Master Agreement.

The IM CSA/CSD, the Bank Custodian Collateral Transfer Agreement and the Bank Custodian Security Agreement are bilateral agreements entered between the parties.

4. Account control agreement

Where the security-provider will post initial margin to a segregated account held with a bank custodian, the security-provider, the security-taker and the bank custodian must enter into an account control agreement.  The account control agreement governs, among other things, the circumstances and manner in which the security-taker or security-provider can exercise exclusive control over the segregated account and instruct the bank custodian to transfer collateral out of the account. 

Notably, the account control agreement is a tri-partite agreement among the security-provider, the security-taker and the bank custodian.

Generally, an account control agreement allows the security-taker to obtain exclusive control over the segregated account by giving a Notice of Exclusive Control to the bank custodian.  After receiving a Notice of Exclusive Control, the bank custodian would generally only act in accordance with instructions from the security-taker.  An account control agreement would also allow the security-provider to obtain exclusive control over the segregated account by giving a Control Event Notice[3]  to the bank custodian.  After receiving a Control Event Notice, the bank custodian should generally only act in accordance with instructions from the security-provider. 

Major bank custodians have published standard form account control agreements, which are subject to certain elections that the parties can make to reflect their commercial and regulatory needs.  These elections allow the parties to, among other things:

a) When notice effective: agree on whether to impose a delay period before the Control Event Notice takes effect.  If there is a delay period, the parties can further agree on: i. the length of the delay period; ii. whether the security-taker can give a Notice to Contest to the bank custodian stating that the Control Event Notice is groundless, which invalidates the Control Event Notice before it takes effect; and iii. the circumstances in which certain acceleration events can override the delay period; and

b) Competing notices: agree on how the bank custodian should deal with a competing Control Event Notice and Notice of Exclusive Control, including whether the bank custodian must nevertheless comply with a Notice of Exclusive Control given by the security-taker after the security-provider has already given a Control Event Notice to the bank custodian but before the Control Event Notice takes effect.

5. Eligible Collateral Schedule

An Eligible Collateral Schedule is a schedule that sets out the types of eligible collateral that the security-provider can post to the security-taker, including applicable regulatory and foreign exchange haircuts and concentration limits.  Under the tri-party services model, the Eligible Collateral Schedule is agreed amongst the security-provider, the security-taker and the custodian, and is included as part of the account control agreement.  Under the third party services model, the security-provider and the security-taker typically agree between them the Eligible Collateral Schedule .

6. Custody Agreement

Where the security-provider will post initial margin to a segregated account held with a bank custodian, the security-provider will enter into a custody agreement, which will govern the terms of the custody account that the security-provided has established with the bank custodian.  To comply with regulatory margin requirements, initial margin will be transferred from the custody account into the segregated account.  Each bank custodian has its own standard form custody agreement.

7. Euroclear and Clearstream initial margin documents

Where the custodian is not a bank but Euroclear or Clearstream, the parties would enter into:

i. in the case of Euroclear, the 2019 Euroclear Collateral Transfer Agreement and the 2019 Euroclear Security Agreement; or

ii. in the case of Clearstream, the 2019 Clearstream Collateral Transfer Agreement and the 2019 Clearstream Security Agreement. 

Again, the credit support document is split into the collateral transfer agreement and the security agreement for similar reasons as in the bank custodian context.  The Euroclear Collateral Transfer Agreement and Clearstream Collateral Transfer Agreement are generally governed by the same governing law as the relevant ISDA Master Agreement.  The Euroclear Security Agreement is governed by the laws of Belgium, where Euroclear is based, while the Clearstream Security Agreement is governed by the laws of Luxembourg, where Clearstream is based.

The Euroclear and Clearstream initial margin documents are designed to specifically work with the Euroclear and Clearstream membership documents, respectively, which are entered into by the relevant parties.  Therefore, the elections and variations provisions in the Euroclear and Clearstream initial margin documents are somewhat different to those found in the bank custodian initial margin documents.  The membership documents perform a similar role to the account control agreement in the bank custodian context and contain the terms of the tri-party custodial services provided by Euroclear or Clearstream, as the case may be.  

8. One-way and two-way initial margin documents

An initial margin document can be a one-way document or a two-way document.  A one-way document governs the initial margin posting leg of only one party (being the security-provider), which posts initial margin to the other party (being the security-taker).  In contrast, a two-way document governs each party’s initial margin posting leg but these two separate initial margin flows cannot net be netted or set off against each other.   

At the parties’ election, each of the IM CSA/CSD, Bank Custodian Collateral Transfer Agreement, Euroclear Collateral Transfer Agreement and Clearstream Collateral Transfer Agreement may be used as a one-way or a two-way initial margin document.  To do this, the parties simply specify in the relevant initial margin document whether the “One Way Provisions” are “Applicable” or “Not Applicable”. 

Please note, however, that each Bank Custodian Security Agreement, Euroclear Security Agreement and Clearstream Security Agreement can only be used as a one-way document.  For example, even if the parties enter into a two-way Euroclear Collateral Transfer Agreement, they must still enter into two separate Euroclear Security Agreements, one for each party’s initial margin posting leg.  As illustrated below, the ability to use the IM CSA/CSD or collateral transfer agreement as a one-way document is useful where each party uses a different type of custodian. 

III. How do I decide which initial margin documents to use?

The choice of initial documents for any given pair of counterparties depends on a number of factors, including the custodian used by each counterparty, the location of each segregated account and the governing law of the ISDA Master Agreement between the parties.

1. Basic example

To begin with a straightforward example, if the ISDA Master Agreement is governed by New York law and each party has chosen a bank custodian located in New York, then the parties can enter into a two-way IM CSA governed by New York law to provide for the exchange of initial margin.  Similarly, if the ISDA Master Agreement is governed by English law and each party has chosen a bank custodian located in London, then the parties can enter into a two-way IM CSD governed by English law to provide for the exchange of initial margin.  In each of these two scenarios, a separate account control agreement and custody agreement would need to be entered into in respect of each party’s posting leg. 

2. Other examples

a) Same type of custodian

However, in reality, the type of custodian chosen by each party, the governing law of the ISDA Master Agreement and the location of each segregated account would not always be so conveniently aligned.  As noted above, even if both parties have chosen to use a bank custodian as opposed to Euroclear or Clearstream, if the location of the segregated account is different from the jurisdiction the laws of which govern the ISDA Master Agreement, the parties may choose to split the IM CSA/CSD into a collateral transfer agreement and a security agreement.  For example, where the relevant ISDA Master Agreement is governed by English law but the segregated account is located in France, the parties may wish to choose to enter into a Bank Custodian Collateral Transfer Agreement (which shall be governed by English law) and a French law governed Bank Custodian Security Agreement.  

b) Different types of custodian

Things become more complicated where each party chooses a different type of custodian.  Since each party can in theory choose between one of three types of custodians (i.e., a bank custodian, Euroclear or Clearstream), this gives rise to nine possible combinations.  If the parties have chosen the same custodian type, they can generally enter into a two-way IM CSA/CSD, Bank Custodian Collateral Transfer Agreement, Euroclear Collateral Transfer Agreement or Clearstream Collateral Transfer Agreement, as the case may be.  However, each security agreement entered into can only be a one-way document. 

If the parties have chosen different types of custodians, the IM CSA/CSD or the relevant collateral transfer agreement would also need to be a one-way document.  For example, suppose the ISDA Master Agreement is governed by English law and Party A has chosen a bank custodian based in London.  In respect of Party A’s posting leg, a one-way IM CSD, account control agreement and custody agreement would be entered into.  If Party B has chosen Euroclear as its custodian, then in respect of Party B’s posting leg, a one-way Euroclear Collateral Transfer Agreement and Euroclear Security Agreement would be entered into.

IV. Negotiating initial margin documents – overview of some common elections

Despite the development and widespread use of industry standard initial margin documents, these legal documents are highly complex and heavily negotiated, because each document allows the parties to make a large number of elections and further amendments to tailor for their specific commercial and regulatory circumstances. 

The process of negotiating initial margin documents is comparable to negotiating an ISDA schedule or the elections and variables paragraph of the 1994 New York law CSA or 1995 English law CSD.  However, the process can be much more complicated because multiple initial margin and other legal documents are required for each pair of counterparties.  Accordingly, many financial institutions and their counterparties engage external law firms to assist with margin documentation, negotiation and related legal and compliance issues. 

While each initial margin document comes in a pre-printed form, it contains an elections and variables (or equivalent) provision which allows parties to make various elections and amendments to meet applicable commercial and regulatory requirements. 

Please note that the initial margin documents are highly complex legal documents and what follows is a merely simplified, high-level and non-exhaustive overview of some common types of elections that can be made in the initial margin documents.  

1. Regime table

The IM CSA/CSD and each Bank Custodian Collateral Transfer Agreement, Euroclear Collateral Transfer Agreement and Clearstream Collateral Transfer Agreement include a regime table for the parties to complete.  The regime table allows the parties to identify the regulatory margin regime(s) (i.e. the relevant local regulatory margin rules) that apply to their trading relationship. 

Where more than one regime is identified as being applicable, then the initial margin documents will require the security-provider to post initial margin in an amount that will satisfy the strictest requirements among all such Regimes (“Strictest Of Approach”).  By complying with the strictest requirement, the parties will, as a matter of logic, be complying with the less strict requirements imposed by the other applicable local regulatory margin rules.

Where a party is relying on substituted compliance (a concept which is explained in our earlier bilingual article) in respect to a regime, that regime generally would not be specified as being applicable in the regime table. 

2. Elections relating to ISDA SIMMTM

The local regulatory margin rules in many jurisdictions require the amount of initial margin that is to be exchanged to be calculated using either:

i. a standardized initial margin schedule (known as the “regulatory grid”) which generally involves applying regulatory prescribed percentages to the notional amounts of derivatives transactions and adjusting using a net-to-gross ratio (“Mandatory Method”); or

ii. a sophisticated initial margin model approved by the regulator. 

Since initial margin models are generally more risk-sensitive and recognize the benefits of netting to a greater extent, they tend to result in quantitatively lower initial margin requirements than calculations made using the regulatory grid. 

ISDA SIMMTM (“SIMM”) is an initial margin model developed by ISDA which is widely used in the industry to calculate initial margin requirements.  In the initial margin documents, the parties can elect to use SIMM by specifying “SIMM Exception” as being “Not Applicable”.  Even if “SIMM Exception” is specified as being “Applicable”, the parties can further elect the “Fallback to Mandatory Method”, which means that SIMM will still be used unless a party gives notice that it is required under the relevant Regime to use the Mandatory Method for certain types of transactions.  Alternatively, the parties can elect for the Mandatory Method to generally apply. 

3. Selection of margin approach

In the initial margin documents, the parties can select one of three margin approaches for addressing the interaction (if any) between initial margin posted under the initial margin documents and non-regulatory independent amounts posted under other credit support documents. 

Under the Distinct Margin Flow (IM) Approach, as its name suggests, there is no interaction between initial margin calculated and posted under the initial margin documents and non-regulatory independent amounts calculated and posted under other credit support documents between the parties.  In other words, they remain two distinct flows of margin. 

Under the Allocated Margin Flow (IM/IA) Approach, initial margin calculated under the initial margin documents is posted in accordance with such documents, but non-regulatory independent amounts calculated under other credit support documents between the parties will be reduced by the amount initial margin posted under the initial margin documents.

Under the Greater of Margin Flow (IM/IA) Approach, the initial margin and non-regulatory independent amount flows of margin will be combined into a single flow such that the greater of the two amounts must be posted in accordance with the initial margin documents. 

4. Specifying Thresholds and Minimum Transfer Amounts

In the initial margin documents, the parties can specify the “Threshold” for each security-provider, which is basically the amount below which the security-taker is willing to tolerate without receiving any initial margin from the security-provider.  The parties should ensure that the Threshold set in the initial margin documents does not breach any upper limits imposed by applicable local regulatory margin rules, which may be determined at a group level. 

The parties can also specify the “Minimum Transfer Amount” for each party, which basically means that party will only need to post initial margin if the initial margin amount exceeds its Minimum Transfer Amount.  This concept is designed to prevent a party from having to post a nuisance amount of initial margin.  The parties should ensure that the Minimum Transfer Amount set in the initial margin documents does not breach any upper limits imposed by applicable local regulatory margin rules. 

5. Amending the Termination Currency in the ISDA Master Agreement 

In the initial margin documents, the parties can elect to amend the definition of “Termination Currency” in the relevant ISDA Master Agreement to eliminate any foreign exchange mismatch between the existing Termination Currency and the primary currency of denomination of posted initial margin.  Such an amendment may reduce the foreign exchange haircut that would otherwise apply to the amount of posted initial margin under certain local regulatory margin rules.

6. Conditions precedent provision

The conditions precedent provision in the initial margin documents provides that each party’s initial margin transfer obligations are subject to the following conditions precedent:

i. no Event of Default, Potential Event of Default or Specified Condition (each as defined in the relevant initial margin documents) has occurred and is continuing with respect to the other party; and

ii. no Early Termination Date has occurred or been designated for which unsatisfied payment obligations exist which is in respect of all “Covered Transactions” (being transactions under the ISDA Master Agreement that are subject to initial margin requirements under applicable regimes).  

The conditions precedent provision will apply unless it is expressly disapplied in the elections and variables paragraph. 

7. Rights and remedies in respect of posted initial margin

Under the initial margin documents, upon the occurrence of certain trigger events, the security-taker or the security-provider (as applicable) may exercise certain rights and remedies in respect of posted initial margin, including by giving control or access notices to the custodian. 

In terms of terminology, a trigger event that enables the security-taker to exercise enforcement rights and remedies is referred to as a “Security-taker Rights Event”.[4]  A trigger event that enables the security-provider to exercise rights and remedies to essentially take back the posted initial margin is referred to as a “Security-provider Rights Event”.[5] 

Subject to further customisation by the parties, a Security-Taker Rights Event generally occurs when an Early Termination Date in respect of all transactions has occurred or been designated under the relevant ISDA Master Agreement as a result of an Event of Default or a Termination Event that is designated in the initial margin Documents as an “Access Condition” with respect to the security-provider.  We note that if an account control agreement permits a Notice of Exclusive Control to not include instructions as to the transfer of assets from the segregated account, the security-taker may be entitled under the initial margin documents to deliver a Notice of Exclusive Control (thereby “freezing” the segregated account) as soon as an Event of Default or Access Condition has occurred and is continuing in relation to the security-provider, without having to wait for the occurrence of a Security-Taker Rights Event (which further requires the occurrence or designation of an Early Termination Date in respect of all transactions as a result of an Event of Default or Access Condition).  In contrast, the Security-Provider is generally not allowed to deliver a Control Event Notice until a Security-Provider Rights Event has occurred and is continuing. 

Subject to further customisation by the parties, a Security-Provider Rights Event generally occurs when an Early Termination Date in respect of all transactions has occurred or been designated under the relevant ISDA Master Agreement as a result of an Event of Default or a Termination Event that is designated in the initial margin documents as an “Access Condition” with respect to the security-taker. 

In the initial margin documents, the parties can elect which Termination Events (if any) shall constitute an Access Condition in respect of each party.  The initial margin documents also allow the parties to make a number of other elections in respect of the triggers for exercising certain rights and remedies in respect of posted initial margin.  For example, the parties may elect to apply the “Security-Provider Full Discharge Condition”[6], which is basically designed to ensure that the security-provider may only remove posted initial margin out of the segregated account if it has met all its early termination-related payment obligations to the security-taker under the relevant ISDA Master Agreement. 

Where initial margin is held with a bank custodian, the relevant account control agreement may already specify the trigger events that would allow the security-provider or security-taker (as applicable) to issue control notices to the bank custodian.  In that case, the parties may elect in the initial margin documents for the relevant account control agreement trigger events to override the Security-Taker Rights Events and Security-Provider Rights Events set out in the initial margin documents.  These elections are not applicable where the custodian is Euroclear or Clearstream because those custodial arrangements do not involve an account control agreement.

8. Allocation of custodian risk

Since initial margin is required to be held by an independent custodian, the initial margin documents include provisions which provide for the consequences if a Custodian Event, Euroclear Event or Clearstream Event, as the case may be (collectively, “Custodian Event”) occurs.  At a high-level, a Custodian Event occurs if the custodian bank, Euroclear or Clearstream fails to comply with valid instructions or with its obligations under the account control agreement, Euroclear membership documents or Clearstream membership documents (as applicable) or resigns. 

The initial margin documents generally provide that the security provider, but not the security-taker, would be liable for the acts or omissions of the custodian, unless the parties specify “Custodian Event” as being applicable, in which case any act or omission of the custodian which is a Custodian Event would not result in a Credit Support Default Event of Default under the relevant ISDA Master Agreement.  Instead, the security-provider must try to cure the Custodian Event by finding an acceptable replacement custodian before an agreed cure period expires.  If the Custodian Event continues after such cure period ends, it would constitute an Additional Termination Event with respect to which each Covered Transaction is an Affected Transaction and both the security-provider and security-taker are Affected Parties.  

V. Where can I learn more about regulatory margin requirements and legal documentation issues?

We at KWM are here to help you.  KWM regularly assists international and PRC-based financial institutions and corporates with bilingual ISDA/NAMFII, CSA, variation margin and initial margin document negotiations, as well as with designing and documenting innovative and complex cross-border derivatives products.  We also regularly advise international and PRC-based clients on margin and other regulatory requirements that apply to derivatives transactions.

KWM has been actively participating in legal developments relating to the enforceability of close-out netting, security interest and title transfer arrangements in the PRC. 

We are familiar with the unique issues faced by PRC-based financial institutions and their counterparties and would be pleased to share our insights with you.  Please feel free to contact our core team members below.

Disclaimer: This publication is provided for general information purposes only and does not constitute legal advice.

Thanks to Dolores Xie, Michael Jiang and Frederic Zhang for their contribution to this article.

The security-provider is also referred to as the “pledgor” or “chargor” in certain initial margin documents.

The security-taker is also referred to as the “secured party” in certain initial margin documents.

A Control Event Notice is sometimes also referred to as a Pledgor Access Notice or Notice of Return of Collateral.

A Security-Taker Rights Event is also referred to as a Secured Party Rights Event or the Enforcement Event in certain initial margin documents.  

A Security-Provider Rights Event is also referred to as a Pledgor Rights Event, Chargor Rights Event or Security-provider Access Event in certain initial margin documents.  

The Security-Provider Full Discharge Condition is also referred to as the Pledgor Full Discharge Condition or Chargor Full Discharge Condition in certain initial margin documents.

Reference

  • [1]

    The security-provider is also referred to as the “pledgor” or “chargor” in certain initial margin documents.

  • [2]

    The security-taker is also referred to as the “secured party” in certain initial margin documents.

  • [3]

    A Control Event Notice is sometimes also referred to as a Pledgor Access Notice or Notice of Return of Collateral.

  • [4]

    A Security-Taker Rights Event is also referred to as a Secured Party Rights Event or the Enforcement Event in certain initial margin documents.  

  • [5]

    A Security-Provider Rights Event is also referred to as a Pledgor Rights Event, Chargor Rights Event or Security-provider Access Event in certain initial margin documents.  

  • [6]

    The Security-Provider Full Discharge Condition is also referred to as the Pledgor Full Discharge Condition or Chargor Full Discharge Condition in certain initial margin documents.

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