Account Control Agreement Custodian

November 27, 2020 No Comments by chip

The “Custody Control Agreement” for each deposit account (with the exception of such a second-tier guarantee account) is fully in effect and effective and is sufficient to allow for a valid, sophisticated security interest and, to the knowledge of each grantor, priority for the collateral agent in the deposit account and the deposit guarantee held by the respective administrator of such a deposit account. , subject to authorized links. The ACA was primarily designed to be used in U.S. markets, particularly for warranties that were mortgaged under a New York credit support annexation law. The aim is to meet the control requirements of the Single Code of Commerce (UCC). However, it is expected that the parties in the European markets will either want to adapt them to use with other guarantee agreements (. B, for example, an English-based credit assistance agreement), i.e. include equivalent provisions in their custom account control regimes. Similarly, the parties can adapt the ACA for the use of other overcompensant assets, such as deposit discounts and equity credit agreements. Like much of the DOCUMENTATION on ISDA derivatives, the ACA is a framework agreement that allows the parties to schedule bilaterally agreed terms.

However, unlike these other documents, the main part of the ACA does not contain many provisions relating to its main purpose, namely the circumstances in which the guarantor or the securityholder may give the custodian instructions for release of the guarantees. The fact that these provisions are included in an appendix and, despite months of industry scrutiny, are structured in proposed elections and not in a standard approach, reflects the inherent difficulty in coordinating the interests of the security provider, the policyholder and the custodian. The International Swaps and Derivatives Association, Inc. (ISDA) has published its 2013 Isda Account Control Agreement (ACA). The ACA was developed by a working group of open-ended sales companies, sellers and custodians and is intended to provide market participants with a framework agreement to document their rules for separating independent amounts related to unexplained derivatives transactions. The ISDA ACA facilitates the process of negotiating contractual agreements providing for the separation of independent amounts (IA) with a third-party custodian.

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