Template:M comp disc 2016 NY VM CSA 3(a)

Now the interesting thing here is the difference that pledged collateral under the New York law versions of the CSA makes over title-transferred collateral regime of the English law versions. You will see the difference in the NY law version’s Delivery Amount, which is the positive difference between Secured Party’s Exposure and the value of Posted Credit Support held by the Secured Party — easy, right? — and the equivalent provision in the English law versions which is the positive difference between the Transferee’s Exposure and the Credit Support adjusted to exclude any inflight but unsettled collateral movements.

The English law versions are a bit more leaden in how they describe things but these amount to the same thing: you don’t get any credit (support) for collateral until it has landed with the other party.

This creates some curious scenarios, as you will see.