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Practical Law Glossary Item 4-386-4984 (Approx. 3 pages)

Glossary

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To pledge, or deposit with one's counterparty or with a third-party custodian or other intermediary, to collateralize the counterparty's exposure under a transaction. Typically used in the context of margin collateral. Margin collateral matters for uncleared over-the-counter swaps and derivatives are typically governed by an ISDA Credit Support Annex (CSA). Margin collateral matters for cleared swaps and derivatives are governed by the applicable clearinghouse. For information on derivatives clearing, see Practice Note, Mechanics of Derivatives Clearing. For tips and detailed information on negotiating margin collateral matters, see The ISDA® Master Agreement: Checklist of Issues to Consider When Negotiating ISDA Credit Support Annex (CSA) Paragraph 13. For information on the regulation of margin collateral matters under the Dodd-Frank Act, see Practice Note, Summary of the Dodd-Frank Act: Swaps and Derivatives: Swap Margin Collateral Matters Under Dodd-Frank.