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=== | ====Legally ineligible Credit Support==== | ||
=====New for the regulatory margin CSAs===== | |||
There is no such concept in the [[ancient CSA]]s, concerning as it does ''legal'' and not ''contractual'' ineligibility of [[credit support]], and that being a function of criteria imposed by regulators on one’s ''mandatory'' obligations to post and collect [[Variation margin|margin]], which did not exist before 2016, it is hardly surprising {{icds}} of yore didn’t anticipate the need for this clause, which is convoluted, finnicky, and you can avoid the need for it entirely, should you post [[cash]] in a sensible [[currency]]. | |||
=== | =====Regulatory margin {{ttcsa}} vs {{sicsa}}===== | ||
In most respects they are identical (with references to “{{vmcsaprov|Transferor}}” and “{{vmcsaprov|Transferee}}” switched to “{{nyvmcsaprov|Pledgor}}” and “{{nyvmcsaprov|Secured Party}}”). There are two technical differences, for completists: | In most respects they are identical (with references to “{{vmcsaprov|Transferor}}” and “{{vmcsaprov|Transferee}}” switched to “{{nyvmcsaprov|Pledgor}}” and “{{nyvmcsaprov|Secured Party}}”). There are two technical differences, for completists: | ||
*The exception in the {{vmcsa}} for {{vmcsaprov|Legally Ineligible Credit Support}} counting as {{vmcsaprov|Eligible Credit Support}} for the purpose of {{vmcsaprov|Credit Support Balance}} and {{vmcsaprov|Equivalent Credit Support}}. This is because, being a {{ttca}}, even though it is worth zero ''for the purposes of discharging one’s regulatory obligation to collect and return collateral'', in the ''real'' world it is still worth something, and the {{vmcsaprov|Transferee}} still has to give it back, even if that has no effect on [[Value - VM CSA Provision|valuations]] under the {{vmcsa}}. With a {{nyvmcsa}} since the {{nyvmcsaprov|Secured Party}} never<ref>Ahem [[Use of Posted Collateral (VM) - NY VM CSA Provision|rehypothecation]] folks.</ref> “gets” it in the first place, the {{nyvmcsaprov|Secured Party}} doesn’t have to give it back either. (By the way, if you aren’t saying, “hey, but what about rehypothecation under Paragraph {{nyvmcsaprov|6(c)}}?” yet, you ''should'' be.) | *The exception in the {{vmcsa}} for {{vmcsaprov|Legally Ineligible Credit Support}} counting as {{vmcsaprov|Eligible Credit Support}} for the purpose of {{vmcsaprov|Credit Support Balance}} and {{vmcsaprov|Equivalent Credit Support}}. This is because, being a {{ttca}}, even though it is worth zero ''for the purposes of discharging one’s regulatory obligation to collect and return collateral'', in the ''real'' world it is still worth something, and the {{vmcsaprov|Transferee}} still has to give it back, even if that has no effect on [[Value - VM CSA Provision|valuations]] under the {{vmcsa}}. With a {{nyvmcsa}} since the {{nyvmcsaprov|Secured Party}} never<ref>Ahem [[Use of Posted Collateral (VM) - NY VM CSA Provision|rehypothecation]] folks.</ref> “gets” it in the first place, the {{nyvmcsaprov|Secured Party}} doesn’t have to give it back either. (By the way, if you aren’t saying, “hey, but what about rehypothecation under Paragraph {{nyvmcsaprov|6(c)}}?” yet, you ''should'' be.) | ||
*The exception for valuation on {{csaprov|Default}} — that flows from the fundamental difference between the {{vmcsa}} a {{ttca}} which is a {{isdaprov|Transaction}} under the {{isdama}} and the {{nyvmcsa}} which is a {{sfca}} which is only a {{isdaprov|Credit Support Document}} under the {{isdama}}. <br> | *The exception for valuation on {{csaprov|Default}} — that flows from the fundamental difference between the {{vmcsa}} a {{ttca}} which is a {{isdaprov|Transaction}} under the {{isdama}} and the {{nyvmcsa}} which is a {{sfca}} which is only a {{isdaprov|Credit Support Document}} under the {{isdama}}. <br> |