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In a Nutshell™ Section 3(c):
3(c) Exchanges.
- (i) On any Local Business Day the Transferor may ask the Transferee to exchange some “New Credit Support (VM)” for some “Original Credit Support (VM)” already in its Credit Support Balance (VM).
- (ii) If the Transferee consents:
- (A) the Transferor must transfer the New Credit Support (VM) to the Transferee on the Settlement Day after it receives the Transferee’s consent; and
- (B) the Transferee must transfer to equivalent Original Credit Support (VM), with a prevailing Value as close as practicable to, but not more than, that of the New Credit Support (VM), to the Transferor on the Settlement Day after the Transferee receives the New Credit Support (VM) (the “Exchange Date”).
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2016 VM CSA full text of Section 3(c):
3(c) Exchanges.
- (i) Unless otherwise specified in Paragraph 11, the Transferor may on any Local Business Day by notice inform the Transferee that it wishes to transfer to the Transferee Eligible Credit Support (VM) specified in that notice (the “New Credit Support (VM)”) in exchange for certain Eligible Credit Support (VM) (the “Original Credit Support (VM)”) specified in that notice comprised in the Transferor’s Credit Support Balance (VM).
- (ii) If the Transferee notifies the Transferor that it has consented to the proposed exchange,
- (A) the Transferor will be obliged to transfer the New Credit Support (VM) to the Transferee on the first Settlement Day following the date on which it receives notice (which may be oral telephonic notice) from the Transferee of its consent and
- (B) the Transferee will be obliged to transfer to the Transferor Equivalent Credit Support (VM) in respect of the Original Credit Support (VM) not later than the Settlement Day following the date on which the Transferee receives the New Credit Support (VM), unless otherwise specified in Paragraph 11(e) (the “Exchange Date”); provided that the Transferee will only be obliged to transfer Equivalent Credit Support (VM) with a Value as of the date of transfer as close as practicable to, but in any event not more than, the Value of the New Credit Support (VM) as of that date.
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Related Agreements
Click here for the text of Section 3(c) in the 1995 English Law CSA
Click here for the text of Section 3(c) in the 2016 English Law VM CSA
Click [[{{{3}}} - NY VM CSA Provision|here]] for the text of the equivalent, Section [[{{{3}}} - NY VM CSA Provision|{{{3}}}]] in the 2016 NY Law VM CSA
Comparisons
Template:Csadiff 3(c)
{{nycsadiff {{{3}}}}}
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