Account control agreement

Revision as of 17:22, 17 June 2016 by Amwelladmin (talk | contribs)

also known as a tri-party collateral arrangement; an arrangement wherein a debtor pledges collateral to a custodian to hold it for that pledgor, but subject to a security in favour of a pledgee. The agreement generally provides that neither party may instruct the custodian to do anything with the asset without the other's consent, except in the direst of circumstances.

Indemnity

Even in those dark days the custodian will be reluctant to do anything and may ask for an indemnity. Why would you indemnify the Custodian for actions it takes under an account control agreement?

The logic runs something like this:


see also

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