Mastering ISDA Collateral Documents

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.

• About the authorsDisclaimer AcknowledgementsAuthors’ foreword  1 IntroductionDefinition of termsWhy collateral is takenTypes of collateralProduct risk exposure coveredEvolution of collateral documentation  2 Collateral management from a European perspectiveSome facts and figuresWhat collateral management units doThe importance of policies and proceduresSetting up the collateral relationshipExposure monitoring and collateral valuation and callingTransfersReuse of collateralCollateral substitutionsDistributionsDisputesPortfolio reconciliationsDefaultsBranchesExternal collateral management services  3 Legal issues relating to collateral from the European and US perspectivesEuropean perspective by Paul HardingIntroductionGeneral issuesRecharacterisationConflict of laws rulesThe PRIMA ruleOther legal issuesISDA collateral legal opinionsThe European Directive on Financial Collateral ArrangementsDraft Hague Convention on indirectly held securitiesAmending Directive to the Collateral Directive and SettlementFinality DirectiveGeneva Securities ConventionCollateralisation and central clearing counterpartiesUS perspective by Christian Johnson                                                                        Introduction                                                                                                                 Enforcement of New York choice of law                                                                      Security interest creation and perfection                                                                        Exercising  rights under the Security AgreementOther issuesOther enforcement concernsDodd-Frank changes4 Credit issues relating to collateralEstablishment of collateral management risk guidelinesInitial marginHaircutsThresholdsMinimum Transfer AmountsEli