ISDA Credit Support Annex
USA
ISDA Credit Support Annex (CSA)
The 1994 Credit Support Annex (CSA) published by the International Swaps and Derivatives Association, Inc. (ISDA). This document governs collateral arrangements between the parties that have entered into derivative transactions under an ISDA Master Agreement.
The CSA is an annex to the ISDA Schedule, which, with the CSA, is incorporated into, supplements and forms a part of the ISDA Master Agreement. The first 12 paragraphs of the CSA are standard, pre-printed boilerplate provisions that are not altered on their face. Modifications to these provisions, as well as additional provisions that the parties wish to add, if any, are specified in paragraph 13 of the CSA, which the parties draft, usually based on a standard CSA paragraph 13 template published by ISDA. In addition to specifying modifications to paragraphs one through 12, paragraph 13 typically outlines the types of collateral that the parties agree are eligible for posting (eligible collateral) as well as minimum collateral transfer amounts (MTA) and certain thresholds, if any, of exposure of one party to the other above which collateral must be posted.
Like the ISDA Master and Schedule, the CSA applies to all transactions entered into under a particular ISDA Master. If there are multiple transactions entered into under a particular ISDA Master and the parties have executed a related CSA, the parties' positions on all of the transactions are netted to arrive at an aggregate trading position. The parties then use that position to determine whether or not collateral must be transferred from one party to the other (for example, if one party's position has improved in the aggregate, it may be entitled to the return of some or all of the collateral that it has posted with its counterparty and/or it may be entitled to receive collateral from its counterparty). Parties typically mark to market their trading positions as well as the value of posted collateral on a daily basis to determine their relative exposure and whether or not collateral must be transferred between them. The CSA contains dispute-resolution mechanisms in the event the parties disagree on these values. Collateral is often transferred between the parties on a daily basis, though sometimes less frequently.
See also
in the money

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • Credit Support Annex — A Credit Support Annex, or CSA, is a legal document which regulates credit support (collateral) for derivative transactions. It is one of the four parts that make up an ISDA Master Agreement but is not mandatory. It is possible to have an ISDA… …   Wikipedia

  • Credit Support Annex — A credit support annex provides credit protection by setting forth the rules governing the mutual posting of collateral. CSAs are used in documenting collateral arrangements between two parties that trade privately negotiated (over the counter)… …   Investment dictionary

  • ISDA master agreement — a.k.a. the ISDA An industry standard agreement used between the counterparties to privately negotiated ( i.e., nonexchange traded) derivatives transactions. The body of the master agreement presents the most common legal and operating terms and… …   Financial and business terms

  • the ISDA — ISDA master agreement a.k.a. the ISDA An industry standard agreement used between the counterparties to privately negotiated ( i.e., nonexchange traded) derivatives transactions. The body of the master agreement presents the most common legal and …   Financial and business terms

  • CSA — abbreviation for Child Support Agency. Collins dictionary of law. W. J. Stewart. 2001. CSA …   Law dictionary

  • confirmation — con·fir·ma·tion /ˌkän fər mā shən/ n 1: the act or process of confirming, assuring, or upholding seeking confirmation of the agreement; specif: the ratification of an executive act by a legislative body senate confirmation of the Supreme Court… …   Law dictionary

  • Collateral management — Collateral has been used for hundreds of years to provide security against the possibility of payment default by the opposing party in a trade. Collateral management began in the 1980s, with Bankers Trust and Salomon Brothers taking collateral… …   Wikipedia

  • trade confirmation — USA trade confirmation, Also known as a swap confirmation, or simply a confirmation. A document which parties to a derivatives transaction use to specify the commercial terms of the transaction, including pricing terms such as spreads. A… …   Law dictionary

  • swap confirmation — USA trade confirmation, Also known as a swap confirmation, or simply a confirmation. A document which parties to a derivatives transaction use to specify the commercial terms of the transaction, including pricing terms such as spreads. A… …   Law dictionary

  • long-form confirmation — USA A document that specifies the terms of a derivatives transaction, which functions as both a Schedule to an ISDA Master Agreement and a trade confirmation. Parties to a derivatives transaction may use a long form confirmation if they wish to… …   Law dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.