Template:M comp disc 2016 CSA 2(a)

Now the interesting thing here is the difference that pledged collateral under the 2016 NY Law VM CSA makes over title-transferred collateral regime of the 1995 CSA. You will see the difference in the 1994 NY CSA’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 2016 VM CSA’s equivalent provision which is the positive difference between the Transferee’s Exposure and the Credit Support Balance adjusted to exclude any inflight but unsettled collateral movements.

The English version is a bit more leaden in how it describes 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 if you read on.