Bony Account Control Agreement

The ISDA ACA has a similar structure to the ISDA Master Agreement. It aims to streamline negotiations on the retention of freedom by three parties by proposing a standard agreement with an accompanying annex containing the proposed optional provisions, which can be adapted as needed. Article 9 of the Uniform Commercial Code (UCC) defines a current account as a receivable, time, savings account, savings account or similar account held with a bank. Unlike most types of collateral, filing a UCC-1 financing statement does not perfect a pledge right on a current account. A lender can only perfect a right of pledge on a current account by taking « control » of the account. Since 1985, ISDA has worked to make global OTC derivatives markets safer and more efficient. Today, ISDA has more than 800 member institutions from 60 countries. These members include a wide range of OTC derivatives market participants, including companies, investment managers, public and supranational companies, insurance companies, energy and commodities companies, as well as international and regional banks. Members include, in addition to market participants, key elements of the derivatives market infrastructure, including exchanges, clearing houses and deposits, as well as law firms, audit firms and other service providers. Information about ISDA and its activities can be found on the association`s website: www.isda.org.

A lender may establish « control » in one of the following ways: (i) the borrower maintains his or her deposit account directly with the lender; 2. the lender becomes the beneficial owner of the borrower`s deposit accounts with the borrower`s custodian banks; or (3) the lender and borrower enter into a deposit account control agreement (known as DACA) with the borrower`s custodian bank. In any case, these agreements apply in addition to the hedging agreement by which the borrower grants a hedging interest for his current accounts. Each custodian bank often has its own form of DACA, although the elements listed above of any form are common. AACs are discussed and negotiated. Therefore, borrowers and lenders should realize that it may take some time before a DACA is agreed and signed by all parties for the lender to obtain an advanced security interest for a deposit account. . .

.