Minimum Transfer Amount - CSA Provision

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CSA Anatomy


In a NutshellTM Section Minimum Transfer Amount:

Template:Nutshell 1995 CSA Minimum Transfer Amount view template

1995 ISDA CSA full text of Section Minimum Transfer Amount:

"Minimum Transfer Amount” means, with respect to a party, the amount specified as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified, zero.
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Related Agreements
Click here for the text of Section Minimum Transfer Amount in the 1995 English Law CSA
Click here for the text of Section Minimum Transfer Amount 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 Minimum Transfer Amount
{{nycsadiff {{{3}}}}}
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)

Transfers of variation margin under a credit support annex fly back and forth on the basis of the change in Exposure since the last time the parties transferred collateral, but subject to a couple of thresholds: the Minimum Transfer Amount, the Threshold[1] There is also the {csaprov|Independent Amount}}, bound up with the general margin calculation in the naive framework of the 1995 ISDA CSA but recognised as a completely separate thing from variation margin in the regulatory margin-driven 2016 ISDA VM CSA.

  • Threshold: This is the total exposure to you your counterparty is prepared to wear without any variation margin at all. These days it is limited by margin regulations in different jurisdictions, but there was once a time where buy-side counterparties, sovereign wealth funds and the like would say, “and for me? Oooh, I don’t know ... let’s say infinity shall we, snapperhead?” and guileless brokers would collapse like a two-man pup tent with no poles, in a shameless ritual whereupon priapic salespeople would pepper their poor beleaguered credit officers with all kinds of illegitimate oratorical techniques. “They say all their other counterparties have given this!!” being just the favourite.
  • Minimum Transfer Amount or “MTA”: This is really an operational measure, to avoid the hassle of transferring trivial amounts where the Exposure hasn’t changed a great deal overnight. So the Minimum Transfer Amount is simply the smallest amount you have to be bothered transferring over. It might be USD1,000 or USD100,000, but once the exposure is more than your MTA, you do have to pay up to the dollar and cent (at least to the extent of any rounding required by Paragraph 11(b)(iii).
  • Not to be confused, of course, with the Threshold Amount in the ISDA Master Agreement, used to calculate the Cross Default trigger.