Practical Guide to the 2016 ISDA Credit Support Annexes For Variation Margin under English and New York Law

Paul C. Harding is a graduate of the University of London, and has worked in several UK and foreign banks in London, in credit, marketing and documentation roles. Since 1990 he has been involved with derivatives documentation. He was a well-known negotiator in the City of London with Barclays Capital Securities Limited and Hill Samuel Bank Limited, where he was Head of Treasury Documentation. In February 1997 he founded Derivatives Documentation Limited, a derivatives consultancy and project management company, based in the City of London and providing negotiation, recruitment and in-house training services in derivatives documentation (website: www.derivsdocu.com). Its clients include many of the world’s leading banks. Since 2000 the company has also done considerable repo documentation training. In November 2001 Paul’s book Mastering the ISDA Master Agreement was published by Financial Times–Prentice Hall. This was followed by his Mastering Collateral Management and Documentation, written in conjunction with Christian Johnson, which was published by Financial Times–Prentice Hall, in November 2002. His book on the 2002 ISDA Master Agreement was published in December 2003 also by Financial Times–Prentice Hall, and in 2004 the first edition of A Practical Guide to using Repo Master Agreements by Paul Harding and Christian Johnson was published by Euromoney Books.Abigail J. Harding is a graduate of the University of East Anglia and has been involved with OTC derivatives since 2005. She initially worked in credit derivatives back office and middle office roles with Morgan Stanley in London for 3 years. Since joining Derivatives Documentation Limited in 2008 (she is now Managing Director) she has worked on a number of in-house and outsourced assignments relating to ISDA, CSA and GMRA negotiations. For the past two years her main focus has been on variation margin and initial margin collateral documentation.

The global regulatory pressure to create new standardized documentation for the complicated and arcane process of posting variation margin has been extraordinary. In response, ISDA issued two standard forms of Credit Support Annexes for Variation Margin. Thankfully for neophytes and experts alike, Paul Harding and Abigail Harding have provided a rosetta stone for understanding these new forms and the regulations and regulatory environment surrounding them. This new practice guide provides an articulate, cogent and comprehensive discussion of these issues and the regulations driving their creation, complete with a thorough annotation of each of the provisions in the two 2016 Credit Support Annexes. No derivative documentation specialist or practitioner’s bookshelf will be complete without it.

• The new regulatory scene for OTC derivatives and collateralThe 2016 ISDA Credit Support Annex For Variation Margin (VM) under English LawThe 2016 ISDA Credit Support Annex For Variation Margin (VM) under New York LawImportant developments since the global financial crisis