Paying Agency Agreement for the United States

Paying Agency Agreement Template for United States

A Paying Agency Agreement is a legal contract governed by U.S. federal and state laws that establishes the relationship between an issuer and a paying agent, typically a bank or financial institution. The agreement outlines the terms and conditions under which the paying agent will process and distribute payments to security holders on behalf of the issuer. It includes detailed provisions for payment mechanics, responsibilities, compliance requirements, and operational procedures in accordance with U.S. securities regulations and banking laws.

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What is a Paying Agency Agreement?

The Paying Agency Agreement serves as the foundational document for payment administration services in securities and debt instruments. Used when an issuer needs a third party to handle payment distributions, this agreement defines the operational framework, compliance requirements, and service standards. Under U.S. jurisdiction, it must comply with federal securities laws, banking regulations, and state-specific requirements. The agreement typically includes detailed procedures for payment processing, reporting obligations, anti-money laundering compliance, and security measures.

What sections should be included in a Paying Agency Agreement?

1. Parties: Identification of the issuer, paying agent, and any other relevant parties

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

3. Definitions: Key terms used throughout the agreement including regulatory references to Securities Act, Exchange Act, Bank Secrecy Act, and other applicable regulations

4. Appointment and Duties: Formal appointment of paying agent and outline of core responsibilities

5. Payment Terms and Procedures: Details of payment mechanics, timing, and processing

6. Compensation and Expenses: Fees, expenses, and payment terms for the paying agent's services

7. Standard of Care: Expected level of service and duty of care

8. Term and Termination: Duration of agreement and termination provisions

What sections are optional to include in a Paying Agency Agreement?

1. Additional Services: Optional services beyond core paying agent duties, such as calculation agent services

2. Foreign Exchange Provisions: Currency conversion procedures and rates for multi-currency payments

3. Tax Provisions: Handling of tax withholding and reporting requirements under relevant tax laws

4. Force Majeure: Provisions for unforeseen circumstances affecting performance

What schedules should be included in a Paying Agency Agreement?

1. Fee Schedule: Detailed breakdown of all fees and charges

2. Payment Procedures: Detailed operational procedures for processing payments

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

4. Security Procedures: Authentication and security protocols for payment instructions

5. Authorized Persons: List of individuals authorized to give instructions

6. Service Level Agreement: Detailed performance metrics and standards

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

Jurisdiction

United States

Publisher

Genie AI

Document Type

Agency Agreement

Cost

Free to use
Clauses
Industries

Securities Act of 1933: Federal law requiring registration of securities offerings and detailed disclosure requirements for public offerings

Securities Exchange Act of 1934: Federal law governing secondary market trading and establishing SEC oversight of securities markets

Trust Indenture Act of 1939: Federal law governing debt securities and the rights and responsibilities of trustees in bond offerings

Investment Company Act of 1940: Federal law regulating investment companies and their offerings

Bank Secrecy Act: Federal law requiring financial institutions to assist government agencies in detecting and preventing money laundering

USA PATRIOT Act: Federal law establishing Know Your Customer (KYC) requirements and enhanced anti-money laundering provisions

Federal Reserve Regulation T: Federal regulation governing margin requirements and credit extension by brokers

Federal Reserve Regulation U: Federal regulation governing credit transactions secured by securities

State Banking Regulations: State-specific laws governing banking operations and transactions within individual states

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities

State Contract Laws: State-specific laws governing formation and enforcement of contracts

State Trust and Fiduciary Laws: State-specific laws governing trustee and fiduciary responsibilities

SEC Requirements: Regulatory requirements established by the Securities and Exchange Commission for securities transactions

FINRA Regulations: Rules and regulations established by the Financial Industry Regulatory Authority for broker-dealers

OCC Regulations: Regulations established by the Office of the Comptroller of the Currency governing national banks

FDIC Regulations: Regulations established by the Federal Deposit Insurance Corporation for insured financial institutions

Uniform Commercial Code: Standardized set of business laws regulating financial contracts and transactions

MSRB Rules: Municipal Securities Rulemaking Board regulations governing municipal securities transactions

FATCA: Foreign Account Tax Compliance Act requirements for international financial reporting and compliance

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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