Definitions and Inconsistency - VM CSA Provision

2016 VM CSA Anatomy™ →Go uptown In a Nutshell™ Section 1(a): 1(a) Definitions and Inconsistency. Capitalised terms not otherwise defined are defined in Paragraph 10. This Annex prevails over the Schedule, and Paragraph 11 prevails over the rest of this Annex. “Transfer” means, for cash, payment and, otherwise, delivery. view template 2016 VM CSA full text of Section 1(a): 1(a) Definitions and Inconsistency. Capitalised terms not otherwise defined in this Annex or elsewhere in this Agreement have the meanings specified pursuant to Paragraph 10, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 11 and the other provisions of this Annex, Paragraph 11 will prevail. For the avoidance of doubt, references to “transfer” in this Annex mean, in relation to cash, payment and, in relation to other assets, delivery. view template Related Agreements Click here for the text of Section 1(a) in the 1995 English Law CSA Click here for the text of Section 1(a) in the 2016 English Law VM CSA Click here for the text of the equivalent, Section 1(a) in the 2016 NY Law VM CSA Comparisons 1995 CSA and 2016 VM CSA: click for comparison 2016 VM CSA and 2016 NY Law VM CSA: click for comparison Resources Full wikitext | Nutshell wikitext Navigation 1 (Interpretation) | 2 (Credit Support Obligations) | 3 (Transfers, Calculations and Exchanges) | 4 (Dispute Resolution) | 5 (Title Transfer etc) | 6 (Default) | 7 (Representation) | 8 (Expenses) | 9 (Miscellaneous) | 10 (Definitions) | 11 (Elections and Variables) Index: Click ᐅ to expand: 2016 VM CSA 2018 CSD 1995 CSA Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

A paragraph of unremarkable, if unnecessary, throat-clearing, though marred by a bizarre for the avoidance of doubt rider which functions as both a non-sequitur — no one was talking about transfers here, much less was in any particular state of confusion about them, so why bring it up now? — but also the classic self-hack: rather than avoiding doubt, this rider is calculated to do nothing quite so much as introduce it. Wait: was I meant to be doubting something here? Should I have been confused? Have I missed something?

There is nothing a cheerful attorney likes more than to worry about things, and she will toss sleeplessly for nights on end, fully occupied by questions such as — is “delivery” of cash different from “payment” of it? Is there something legally significant about “payment” that I somehow missed, in Banking Law 302, in 1989?

Tell your legal eagles to relax. It won’t do any good, but you can tell them. To the best the JC can figure out, all this means is that a Transferor must physically part with its collateral, handing it bodily over to the Transferee.

There is an interesting question as to what this might mean if your counterparty is also your banker, and you direct it to transfer credit support into the bank account you maintain with it, meaning that legally the counterparty hasn’t done anything with the cash at all — not an unusual scenario, should you be a hedge fund and the counterparty your prime broker — but this will set your legal eagles off again, and we don’t want that. We are just getting started.

Note that in the 2016 NY Law VM CSA, “Transfer” is separately defined, U.S. attorneys being the completists that they are.

See also

• Cash
• Prime broker
• Throat-clearing
• “Transfer” under the 2016 NY Law VM CSA