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Credit Support Agreement Template for Canada

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Key Requirements PROMPT example:

Credit Support Agreement

"I need a Credit Support Agreement under Canadian law for a bilateral arrangement between our investment fund and a major Canadian bank, with specific provisions for both cash and securities collateral, to be effective from March 1, 2025."

Document background
A Credit Support Agreement is essential in financial transactions where parties seek to mitigate counterparty credit risk through the posting of collateral or other forms of credit support. This document, governed by Canadian law, operates within a complex regulatory framework including federal banking laws, provincial security interest legislation (PPSA or Civil Code of Quebec), and bankruptcy laws. It is typically used in conjunction with master trading agreements, derivatives contracts, or lending arrangements, providing detailed mechanisms for calculating exposure, managing collateral, and enforcing security interests. The agreement becomes particularly crucial in times of market volatility or when dealing with substantial financial exposures, helping parties manage their credit risk while maintaining regulatory compliance. The document must carefully consider Canadian legal requirements for creation and perfection of security interests, as well as specific provincial law variations.
Suggested Sections

1. Parties: Identification of the credit support provider(s) and recipient(s)

2. Background: Context of the agreement, reference to related agreements, and purpose of the credit support arrangement

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to industry standard definitions

4. Credit Support Obligations: Core obligations regarding posting of collateral, including delivery amount calculations and transfer timing

5. Conditions Precedent: Conditions that must be satisfied before the agreement becomes effective

6. Creation and Perfection of Security Interest: Provisions establishing the security interest and steps for perfection

7. Representations and Warranties: Standard and specific representations by each party

8. Valuation and Calculations: Methods for valuing collateral and calculating exposure

9. Substitution and Return of Collateral: Rules and procedures for substituting and returning posted collateral

10. Income and Interest on Collateral: Treatment of income earned on posted collateral

11. Events of Default: Circumstances constituting default and consequences

12. Rights and Remedies: Enforcement rights and remedies upon default

13. Dispute Resolution: Procedures for resolving disputes regarding calculations or valuations

14. Notices: Requirements for giving effective notice under the agreement

15. Governing Law and Jurisdiction: Choice of law and jurisdiction provisions

16. General Provisions: Standard boilerplate provisions including amendments, assignments, and severability

Optional Sections

1. Additional Credit Support Provider Provisions: Used when there are third-party credit support providers or guarantors

2. Cross-Border Provisions: Required when the agreement involves parties from different jurisdictions

3. Eligible Collateral Schedule Amendments: Used when parties want to modify the types of eligible collateral

4. Tax Provisions: Detailed tax provisions needed for cross-border arrangements or specific tax situations

5. Regulatory Compliance: Special provisions required for regulated entities or to comply with specific regulatory regimes

6. Independent Amount Provisions: Used when additional collateral beyond exposure calculations is required

7. Minimum Transfer Amount Provisions: Optional provisions to set thresholds for collateral transfers

8. Custody Arrangements: Required when using third-party custodians for collateral

9. Set-off Rights: Additional set-off provisions beyond standard rights

Suggested Schedules

1. Eligible Collateral Schedule: Lists approved types of collateral and applicable haircuts

2. Valuation Percentages: Detailed schedule of valuation percentages for different types of collateral

3. Notice Details: Contact information and notice details for all parties

4. Form of Transfer/Release Notice: Standard forms for requesting collateral transfers or releases

5. Custody Agreement: If applicable, agreement with third-party custodian

6. Jurisdictional Requirements: Specific requirements for different jurisdictions involved

7. Form of Eligibility Notice: Standard form for confirming eligibility of new collateral types

8. Calculation Examples: Examples of exposure and collateral requirement calculations

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions































































Clauses









































Relevant Industries

Banking

Financial Services

Investment Management

Insurance

Energy Trading

Commodities Trading

Asset Management

Capital Markets

Corporate Treasury

Private Equity

Hedge Funds

Infrastructure

Real Estate

Manufacturing

Technology

Relevant Teams

Legal

Treasury

Risk Management

Compliance

Trading Operations

Credit Risk

Collateral Management

Financial Control

Regulatory Affairs

Documentation

Securities Operations

Transaction Management

Relevant Roles

Chief Financial Officer

Treasury Manager

Risk Manager

Collateral Manager

Legal Counsel

Compliance Officer

Credit Risk Officer

Trading Operations Manager

Financial Controller

Securities Operations Manager

Credit Analyst

Portfolio Manager

Corporate Treasurer

Legal Operations Manager

Regulatory Compliance Manager

Transaction Manager

Documentation Specialist

Credit Risk Analyst

Industries









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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