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In a Nutshell™ Section 6(c):
6(c) Use of Posted Collateral (VM). Unless otherwise agreed specified in Paragraph 13 and without limiting the parties’ rights and obligations (especially remedies under Paragraph 8), while the Secured Party is not effectively in default, it may, notwithstanding Section 9-207 of the Uniform Commercial Code;
- 6(c)(i) Rehypothecate: rehypothecate, sell outright or otherwise deal with any Posted Collateral (VM) it holds absolutely; and
- 6(c)(ii) Register: register Posted Collateral (VM) in its own or its Custodian (VM)’s name.
References to Transfering Eligible Credit Support (VM) or Posted Credit Support (VM) under this 2016 NY Law VM CSA will be construed to apply as if the Secured Party still holds all Posted Collateral (VM) even where in fact it doesn’t.
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2016 NY VM CSA full text of Section 6(c):
6(c) Use of Posted Collateral (VM). Unless otherwise specified in Paragraph 13 and without limiting the rights and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an Affected Party with respect to a Specified Condition and no Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding Section 9-207 of the New York Uniform Commercial Code, have the right to:
- 6(c)(i) sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business any Posted Collateral (VM) it holds, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor; and
- 6(c)(ii) register any Posted Collateral (VM) in the name of the Secured Party, its Custodian (VM) or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support (VM) or Posted Credit Support (VM) pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this Agreement, the Secured Party will be deemed to continue to hold all Posted Collateral (VM) and to receive Distributions made thereon, regardless of whether the Secured Party has exercised any rights with respect to any Posted Collateral (VM) pursuant to (i) or (ii) above.
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Related Agreements
Click here for the text of Section 6(c) in the 1995 English Law CSA
Click here for the text of Section 6(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
There is no equivalent provision in either version of the English Law title-transfer CSA.
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