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Rehypothecation: Difference between revisions
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===[[New York law]]-style [[credit support]] arrangements=== | ===[[New York law]]-style [[credit support]] arrangements=== | ||
'' | ''For the specific provision in the {{nyvmcsa}}, and tart commentary thereon, see: {{nyvmcsaprov|Use of Posted Collateral (VM)}}'' | ||
''Re''hypothecation achieves the chimaerical effect of allowing the recipient of ''[[pledge|pledged]]'' [[collateral]] — i.e., [[collateral]] the holder doesn’t ''own'', but simply possesses with a [[security interest]] — to sell that [[collateral]] outright to a third party, on condition that it remains liable the original pledgor to return an identical (“[[fungible]]”) asset at the conclusion of the [[pledge]]. | ''Re''hypothecation achieves the chimaerical effect of allowing the recipient of ''[[pledge|pledged]]'' [[collateral]] — i.e., [[collateral]] the holder doesn’t ''own'', but simply possesses with a [[security interest]] — to sell that [[collateral]] outright to a third party, on condition that it remains liable the original pledgor to return an identical (“[[fungible]]”) asset at the conclusion of the [[pledge]]. | ||