Set The Controls… : ISDA Publishes The 2013 Account Control Agreement

The International Swaps and Derivatives Association, Inc. (ISDA) published on Friday its ISDA 2013 Account Control Agreement (the ACA).  The ACA has been developed by a working group of buy-side, sell-side and custodian firms and is designed to give market participants a framework agreement for documenting their arrangements for the segregation of Independent Amounts relating to uncleared derivative transactions.

Since the collapse of Lehman Brothers in 2008, many market participants have become increasingly aware of the risks associated with the provision of excess collateral.  Even since before the concept of mandatory segregation of collateral was first considered under Dodd-Frank and EMIR, the Derivatives & Structured Finance group at Field Fisher Waterhouse has worked with several buy-side, sell-side and custodian firms in establishing and negotiating their initial margin and haircut segregation arrangements.  Those negotiations are often highly complex, with