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Account control agreement: Difference between revisions
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also known as a [[tri-party collateral arrangement]]; an arrangement wherein a debtor [[pledge]]s 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. | |||
Why would you indemnify the [[Custodian]] for actions it takes under an [[account control agreement]]? | ===[[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: | The logic runs something like this: | ||
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*[[Custodian]] | *[[Custodian]] | ||
*[[Indemnity]] | *[[Indemnity]] | ||
*[[Pledge]] | |||
*[[Security]] | |||
{{anat|CASS}} | {{anat|CASS}} | ||