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The Collateral Management Agreement serves as a critical legal document in Hong Kong's financial markets, establishing the framework for securing financial obligations through collateral arrangements. This agreement is essential when financial institutions need to manage risk exposure through collateral posting and monitoring, particularly in securities lending, derivatives trading, and secured lending transactions. The document, governed by Hong Kong law, details the appointment of collateral managers, specifies eligible collateral types, outlines valuation methodologies, and establishes procedures for collateral movements, substitutions, and enforcement. It incorporates requirements from Hong Kong's regulatory framework, including the Securities and Futures Ordinance and Banking Ordinance, ensuring compliance with local regulatory standards while providing legal certainty for all parties involved.

1. Parties: Identification of the contracting parties including the collateral provider, collateral taker, and any custodian or third-party agent

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

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

4. Appointment and Scope: Formal appointment of the collateral manager and scope of services

5. Collateral Requirements: Types of eligible collateral, initial margin requirements, and maintenance margin requirements

6. Delivery and Settlement: Procedures for delivering, transferring, and settling collateral

7. Valuation: Methods and frequency of collateral valuation, pricing sources, and dispute resolution

8. Substitution Rights: Rights and procedures for substituting collateral

9. Custody Arrangements: Requirements for holding and safekeeping of collateral

10. Rights and Obligations: Detailed responsibilities of each party

11. Events of Default: Circumstances constituting default and consequences

12. Enforcement Rights: Rights and procedures following an event of default

13. Representations and Warranties: Standard legal assurances from each party

14. Fees and Expenses: Payment terms for services and cost allocation

15. Liability and Indemnification: Limitations of liability and indemnification obligations

16. Termination: Circumstances and procedures for terminating the agreement

17. Confidentiality: Obligations regarding confidential information

18. Notices: Communication requirements and contact details

19. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

20. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability