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1994 ISDA Credit Support Annex (Security Interest - New York Law)
The 1994 ISDA Credit Support Annex allows parties to establish bilateral mark-to-market security arrangements. This document serves as an Annex to the Schedule to the ISDA Master Agreement and is designed for use in transactions subject to New York law.
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User's Guide to the 1994 ISDA Credit Support Annex
Click here for TOC
Click here to Read Introduction |
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1995 ISDA Credit Support Annex (Transfer - English Law)
The English Credit Support Annex allows parties to establish bilateral mark-to-market arrangements under English law relying on transfer of title to collateral in the form of securities and/or cash and, in the event of default, inclusion of collateral values within the close-out netting provided by Section 6 of the ISDA Master Agreement. The English Credit Support Annex does not create a security interest, but instead relies on netting for its effectiveness. Like the New York Credit Support Annex, it is an Annex to the Schedule to the ISDA Master Agreement.
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1995 ISDA Credit Support Deed (Security Interest - English Law)
The 1995 ISDA Credit Support Deed allows parties to establish bilateral mark-to-market collateral arrangements under English law relying on the creation of a formal security interest in collateral in the form of securities and/or cash. It is a stand-alone document (not an Annex to the Schedule), but is otherwise comparable to the 1994 ISDA Credit Support Annex for use with ISDA Master Agreements subject to New York law (which also relies on the creation of a formal security interest in the collateral).
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User's Guide to the ISDA Credit Support Documents Under English Law
Click here for TOC
Click here to Read Introduction
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1995 ISDA Credit Support Annex (Security Interest - Japanese Law)
(this form is superseded by the October 21, 2008 publication)
The 1995 ISDA Credit Support Annex was prepared for use in documenting bilateral security and other credit support arrangements between counterparties for transactions documented under an ISDA Master Agreement for which the parties intend to use assets located in Japan as credit support. This Annex assumes that Japanese law will govern questions of perfection and priorities relating to posted collateral and is designed to provide documentation for parties wishing to minimize exposure to counterparties through collateral arrangements in respect of cash, deposit accounts, Japanese government bonds or other marketable securities situated in Japan. The structure and wording of this Annex were designed to conform to the 1994 ISDA Credit Support Annex in order to facilitate its use by those familiar with that Annex. Therefore, parties should generally refer to the User's Guide to the 1994 ISDA Credit Support Annex. The User's Guide to the Japanese Law Annex discusses the differences between the 1994 ISDA Credit Support Annex and the 1995 ISDA Japanese Annex. |
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User's Guide to the 1995 ISDA Credit Support Annex (Security Interest - Japanese Law)
Click here to Read Introduction
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2008 ISDA Credit Support Annex (Loan/Japanese Pledge)
(published October 21, 2008)
The document reflects new netting, bankruptcy and securities clearing system legislation which were implemented in Japan after the 1995 ISDA Credit Support Annex (Security Interest - Japanese Law) was published. It is intended for use in documenting bilateral security and other credit support arrangements between counterparties for transactions documented under an ISDA Master Agreement for which the parties intend to use assets located in Japan as credit support. This Annex assumes that Japanese law will govern questions of perfection and priorities relating to posted collateral and is designed to provide documentation for parties wishing to minimize exposure to counterparties through collateral arrangements in respect of cash, deposit accounts, Japanese government bonds or other marketable securities situated in Japan. It is a stand-alone document (not an Annex to the Schedule). |
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Guidebook for ISDA Credit Support Annexes (Japanese language) 
(published August 28, 2009)
The Guidebook for ISDA Credit Support Annexes is a user-friendly, practical guidebook which is designed to assist users of the ISDA Credit Support Annexes to understand the collateral management and documentation. The topics covered in the Guidebook include the detailed descriptions of (i) Collateral as a Risk Management Tool (ii) Documentation structure and the Terms (iii) Collateral Management and Operations (iv) Forms of the Annexes and legal issues (v) Tax (vi) Close-out process. |
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| Amendments to Credit Support Documents |
Form of Amendment to 1994 ISDA Credit Support Annex (Security Interest - New York Law)
This Amendment will enable parties with 1992 ISDA Master Agreements (which have been amended to include Close-out Amount) to amend their existing Credit Support Annex to take into account the addition of Close-out Amount and the deletion of Market Quotation and Loss.
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Form of Amendment to 1995 ISDA Credit Support Annex (Transfer - English Law)
This Amendment will enable parties with 1992 ISDA Master Agreements (which have been amended to include Close-out Amount) to amend their existing Credit Support Annex to take into account the addition of Close-out Amount and the deletion of Market Quotation and Loss.
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Form of Amendment to 1995 ISDA Credit Support Annex (Transfer - English Law) and;
Form of Amendment to 1994 ISDA Credit Support Annex (Security Interest - New York Law)
This amendment was made in order to resolve a discrepancy between market practice in Japan and the ISDA documentation. Each of the English Law (Transfer) ISDA CSA and New York Law ISDA CSA was amended to have Gross-Up clause not applicable as it allowed the Obligor to argue that the payment should be a gross-up based on Section 2(d) of the ISDA Master Agreement, and resulted in the Obligee being asked not to deduct the withholding tax.
In the Japanese tax system, interest income from cash deposits placed with an account opened with a bank located in Japan, which is paid to a foreign corporation (i.e. a foreign bank) is taxed by withholding at the source by the Japanese payer (Income Tax Law, Article 212, clause 1) unless such interest income is attributable to a branch or other permanent establishment in Japan.
When a Japanese resident bank receives cash collateral from a nonresident bank, it is the market practice that a Japanese resident bank (the Obligee) shall pay the Interest Amount less withholding tax to a nonresident bank (the Obligor). This allowed the Obligor to argue that the payment should be a gross-up based on Section 2(d), and ask the Obligee not to deduct the withholding tax.
Free Download
Click here to view/download pdf (format) - Amendment to CSA (Transfer - English Law)
Click here to view/download pdf (format) - Amendment to CSA (Security Interest - NY Law) |
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Instructions and Additional Provisions for the use of the ISDA Credit Support Annex (New York law) with a Quebec Counterparty
Free Download
Click here to view/download pdf (format) |
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| ISDA Margin Provisions |
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2001 ISDA Margin Provisions
Click here for TOC
Click here to Read Introduction
Free Download
Click here to view/download pdf (format) - Erratum to Part 4 of the 2001 ISDA Margin Provisions |
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User's Guide to the 2001 ISDA Margin Provisions
Click here for TOC
Click here to Read Introduction
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2001 ISDA Margin Provisions and User's Guide
(Special Package Discounts)
Purchase this package either in hard copy or electronic copy and you will receive both the 2001 ISDA Margin Provisions and the User's Guide to the 2001 ISDA Margin Provisions at a reduced rate. |
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| Collateral Documentation |
| 2005 ISDA Collateral Guidelines
The ISDA Collateral Committee has undertaken a comprehensive review of the 1998 Guidelines for Collateral Practitioners. The 2005 ISDA Collateral Guidelines (the “2005 Guidelines”) also revisit some of the recommendations made in the ISDA 1999 Collateral Review.
The 2005 Guidelines are intended to:
- Document the state of collateral management practice at the end of 2004.
- Discuss the nature and mechanics of collateralization, including the key legal foundations.
- Describe the interaction of the collateral management function with other areas of the firm.
- Identify the benefits and risks of collateralization.
- Outline current trends and possible future developments in collateral management.
The 2005 Guidelines takes a comprehensive approach to the many different facets of collateral management. Among the topics addressed are:
- Collateral as a Risk Management Tool;
- Collateral Management Function;
- Documentation for Collateral;
- Margin Call Process;
- Managing Collateral Assets and
- Trends in Collateral Management.
Free Download
Click here to view/download pdf (format)
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Guidance on UK Tax Issues Arising from the Use of the English Law Credit Support Annex (Appendix 2 of the Guidelines for Collateral Practitioners)
Chapter 4 of the 2005 ISDA Collateral Guidelines highlights tax considerations which may affect a firm’s choice of Credit Support Documentation. As a general matter, tax is more likely to be of concern in relation to the title transfer approach reflected in the ISDA Credit Support Annex (Transfer-English Law) or the English law title transfer approach under the 2001 ISDA Margin Provisions (because of the fact that title to the collateral asset has been transferred), although the UK taxation issues have largely been eliminated during the course of bilateral discussions between ISDA and the UK Inland Revenue. Summaries of these discussions were originally included in the Guidelines for Collateral Practitioners in 1998 and have been extracted herein (Appendix 2) for firms’ convenience. Firms should consult with their legal advisors regarding any tax considerations.
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ISDA Collateral Asset Definitions
The ISDA Collateral Asset Definitions standardize the descriptions for the most commonly used collateral assets in various jurisdictions, reducing operational and legal risks in the use of collateral and providing a more streamlined method for including assets in collateral arrangements. The Definitions are structured as a series of tables covering the most commonly used assets in more than twenty jurisdictions. The Definitions are designed for incorporation into any form of collateral agreement, including both ISDA Credit Support documentation and non-ISDA forms of collateral agreement. ISDA anticipates publishing future editions of the ISDA Collateral Asset Definitions, updated to reflect changes in the published definitions and to include additional assets.
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ISDA Glossary of Collateral Terms - Chinese Translation
The Glossary of Collateral Terms – Chinese Translation was complied by a working group organized under the auspices of ISDA’s Asia-Pacific Collateral Committee. It is intended to serve as an educational reference tool and as a practical guide for collateral practitioners in relation to privately negotiated derivatives trades when the use of both English and Chinese languages are required.
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ISDA 1999 Collateral Review
(Please refer to the 2005 ISDA Collateral Guidelines.)
The ISDA 1999 Collateral Review follows the ISDA Guidelines for Collateral Practitioners published in October 1998. The ISDA Guidelines were intended as an introduction to the practicalities of managing collateral for privately negotiated derivatives transactions, while the ISDA Collateral Review is a more advanced discussion of collateral management practices.
The ISDA Collateral Review reflects the experiences of collateral practitioners during periods of market volatility and contains twenty-two recommendations in the area of collateral management. The ISDA Collateral Review also sets out action plans for collateral practitioners, regulators and ISDA to enhance the effectiveness of collateralization as a risk mitigation technique.
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Guidelines for Collateral Practitioners
(Please refer to the 2005 ISDA Collateral Guidelines.)
The Guidelines for Collateral Practitioners are designed as a resource document for organizations designing policies, practices, systems and operations to address the activities that accompany the introduction of ISDA credit support documentation. The Guidelines examine factors involved in structuring collateralized relationships from credit and documentation perspectives and discuss implementing the collateralized relationship once a collateral agreement has been executed (including collateral valuation and inventory management). The Guidelines also discuss maintenance of collateral relationships with on-going operational and communication requirements for making and/or meeting collateral calls.
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2008 ISDA Portfolio Reconciliation in Practice Paper
The Portfolio Reconciliation in Practice Paper provides an overview and best practice recommendations in regard to portfolio reconciliation. The operational advantages of being able to verify cross-asset portfolios of trades amongst counterparties are widely acknowledged as important, especially within the collateral management arena.
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2008 ISDA Best Practice Guidance for Collateralized Portfolio Reconciliation Between Derivative Market Professionals (the "Best Practice Guidance")
The ISDA Collateral Committee has discussed the nature, mechanics and importance of reconciliation for collateralized portfolios. The agreed best practice guidance reflects the key elements for collateralized portfolio reconciliation between derivative market professionals.
Free Download
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Collateral Arrangements in the European Financial Markets
Collateral Arrangements in the European Financial Markets: The Need for National Law Reform and Related Country Reports have been prepared by the Collateral Law Reform Group to study legal impediments to the efficient use of collateral and to promote law reform in this regard.
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