Template:Csa title transfer vs pledge: Difference between revisions

Revision as of 11:32, 10 April 2015

===Title transfer vs. Pledge=== This feels as good a time as any to raise the great subject of title transfer and pledge. In a Nutshell™:

Title Transfer: The English law 1995 CSA – outside the US, by far the most common type of 1995 CSA – is a title transfer document:
- when securities delivered to a party they become the recipient's property absolutely
- recipient does not hold them in custody for the transferor;
- recipient has only an obligation to redeliver an equivalent security.
- Therefore no CASS question arises at any point.
Pledge: The 1995 ISDA CSD (English law) and New York law 1994 NY CSA are “pledge” documents:
- The transferor delivers the securities to the receipient to hold for the transferor – the transferor retains title
- Recipient holds securities as transferor's custodian subject to a security interest securing their obligation under the swap.
- The custody arrangement only exists while recipient holds the security, not before.

@@ Line 6: / Line 6: @@
 **recipient has only an obligation to redeliver an equivalent security.
 **Therefore no {{tag|CASS}} question arises at any point.
-*'''Pledge''': The {{csd}} and New York law {{1994csa}}  are “pledge” documents:
+*'''Pledge''': The {{1995csd}} and New York law {{1994csa}}  are “pledge” documents:
 **The transferor delivers the securities to the receipient to hold for the transferor – the transferor retains title
 **Recipient holds securities as transferor's custodian subject to a {{tag|security interest}} securing their obligation under the swap.
 **The custody arrangement only exists while recipient holds the security, not before.