Cash Collateral Agreement Template for England and Wales

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Key Requirements PROMPT example:

Cash Collateral Agreement

I need a Cash Collateral Agreement for a bilateral arrangement between our investment firm and a major bank, where we'll be providing €10 million in cash security for a trading facility starting March 2025, with monthly interest payments and quarterly valuation dates.

Document background
A Cash Collateral Agreement is utilized when parties need to establish security arrangements using cash as collateral. This document is essential in financial transactions where cash security is required to support obligations or exposure between parties. Under English and Welsh law, it provides a robust framework for creating and enforcing security interests over cash collateral, incorporating requirements from the Financial Collateral Arrangements Regulations and related legislation. The agreement typically covers collateral delivery, maintenance requirements, use restrictions, enforcement rights, and regulatory compliance obligations.
Suggested Sections

1. Parties: Identification of all parties to the agreement including full legal names and addresses

2. Background/Recitals: Context of the agreement and relationship between parties

3. Definitions and Interpretation: Key terms used throughout the agreement and interpretation rules

4. Provision of Collateral: Terms governing the delivery and maintenance of cash collateral

5. Security Interest: Creation and perfection of security interest over the cash collateral

6. Collateral Maintenance: Requirements for maintaining collateral levels, top-up provisions

7. Use and Control of Collateral: Rights and restrictions regarding use of the collateral

8. Events of Default: Circumstances constituting default and consequences

9. Enforcement: Rights and procedures for enforcing security interest

10. Governing Law and Jurisdiction: Specification of applicable law and courts

Optional Sections

1. Interest Provisions: Terms for interest on cash collateral - use when parties agree that interest will be paid on the collateral

2. Tax Provisions: Treatment of taxes on collateral and interest - use when tax implications need to be specifically addressed

3. Currency Provisions: Rules for handling multiple currencies - use when collateral may be provided in different currencies

4. Regulatory Compliance: Specific regulatory requirements - use when parties are regulated entities

Suggested Schedules

1. Collateral Account Details: Specification of account(s) where collateral will be held

2. Calculation of Collateral Requirements: Methodology for calculating required collateral amounts

3. Form of Notices: Standard forms for various notices under the agreement

4. Authorized Persons: List of persons authorized to act under the agreement

5. Security Documents: Additional security documentation if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Industries

Financial Collateral Arrangements (No. 2) Regulations 2003: Key regulation implementing the EU Financial Collateral Directive, governing creation, perfection, and enforcement of financial collateral with simplified realization procedures

Financial Services and Markets Act 2000 (FSMA): Primary legislation regulating financial services and markets in the UK, including provisions about regulated entities and financial promotion

Companies Act 2006: Core company law legislation covering corporate authority, capacity, registration requirements for charges, and directors' duties

Banking Act 2009: Legislation specifically governing banking institutions and special resolution regime provisions

Insolvency Act 1986: Legislation governing insolvency proceedings, security interests, set-off and netting arrangements, and creditor priority

Financial Markets and Insolvency Regulations 1999: Regulations covering settlement finality and protection of collateral arrangements in financial markets

Money Laundering Regulations 2017: Anti-money laundering legislation establishing due diligence requirements and reporting obligations

Common Law Principles: Fundamental legal principles including contract law, equity and trusts, and security interest principles derived from case law

European Union (Withdrawal) Act 2018: Brexit-related legislation governing retained EU law and its application in UK law

Regulatory Framework: Additional regulatory requirements from Bank of England, Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and Basel III standards

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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