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Credit Default Swap Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Credit Default Swap Agreement

"I need a Credit Default Swap Agreement for a conventional five-year protection arrangement starting March 1, 2025, between our bank as protection buyer and a UAE-based financial institution as protection seller, with physical settlement options and DIFC jurisdiction."

Document background
This Credit Default Swap Agreement template is designed for use in credit risk transfer transactions within the United Arab Emirates' financial markets. It enables financial institutions and corporate entities to manage credit risk exposure through a structured derivative instrument, while ensuring compliance with UAE Central Bank regulations and local legal requirements. The document incorporates provisions for both conventional and Sharia-compliant structures, making it versatile for various market participants. It includes detailed sections on credit events, settlement procedures, and regulatory reporting requirements specific to the UAE jurisdiction. The agreement is particularly relevant for transactions involving UAE-based reference entities or counterparties, and can be adapted for use in both DIFC and wider UAE markets. Essential regulatory considerations include UAE Federal Law No. 14 of 2018 and relevant Central Bank directives on derivatives trading.
Suggested Sections

1. Parties: Identification of the protection buyer and protection seller, including their legal status and contact details

2. Background: Context of the agreement and general commercial purpose

3. Definitions: Comprehensive definitions including Credit Events, Reference Entity, Reference Obligation, and UAE-specific regulatory terms

4. Transaction Terms: Core economic terms including notional amount, fixed rate, credit events covered, and term of the agreement

5. Credit Events: Detailed description of triggering events, including bankruptcy, failure to pay, restructuring, and any UAE-specific credit events

6. Settlement Terms: Physical settlement or cash settlement procedures, valuation methods, and delivery requirements

7. Premium Payments: Payment terms, calculation periods, and payment dates for the CDS premium

8. Representations and Warranties: Standard and UAE-specific representations including capacity, authority, and compliance with local laws

9. Events of Default: Circumstances constituting default under the agreement, including UAE-specific defaults

10. Termination Provisions: Early termination rights, procedures, and consequences

11. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

12. Notices: Communication procedures and contact details for formal notices

13. Miscellaneous: Standard boilerplate provisions adapted for UAE law

Optional Sections

1. Sharia Compliance: Required if the CDS needs to be Sharia-compliant, including relevant structuring and compliance provisions

2. Central Bank Reporting: Required for transactions involving UAE-regulated financial institutions, detailing reporting obligations

3. DIFC Provisions: Required if the agreement is being executed within the DIFC, including specific DIFC requirements

4. Credit Support Provisions: Optional section for collateral arrangements and credit support requirements

5. Additional Tax Provisions: Required if specific UAE tax considerations need to be addressed

6. Multiple Reference Entities: Required if the CDS covers multiple reference entities, including basket or portfolio provisions

Suggested Schedules

1. Schedule 1 - Economic Terms: Detailed economic terms including reference entity, notional amount, fixed rate, and term

2. Schedule 2 - Reference Obligation Details: Specific details of the reference obligation(s) including ISIN, maturity, and type

3. Schedule 3 - Notice Details: Detailed contact information for all types of notices under the agreement

4. Schedule 4 - Credit Support Terms: If applicable, detailed terms of any credit support or collateral arrangements

5. Appendix A - Form of Credit Event Notice: Standard form for notifying credit events

6. Appendix B - Form of Assignment Agreement: Standard form for transferring rights under the agreement

7. Appendix C - Sharia Structure Documentation: If applicable, documentation of Sharia-compliant structure

8. Appendix D - Settlement Documentation: Forms and procedures for physical or cash settlement

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 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

Insurance

Investment Management

Asset Management

Corporate Finance

Islamic Finance

Risk Management

Treasury Services

Capital Markets

Relevant Teams

Legal

Risk Management

Treasury

Trading

Compliance

Islamic Finance

Operations

Documentation

Finance

Credit Analysis

Regulatory Reporting

Deal Structuring

Middle Office

Relevant Roles

Chief Risk Officer

Head of Treasury

Derivatives Trader

Legal Counsel

Compliance Officer

Credit Risk Manager

Structured Products Manager

Islamic Finance Specialist

Portfolio Manager

Trading Operations Manager

Financial Controller

Regulatory Reporting Officer

Documentation Specialist

Investment Manager

Chief Financial Officer

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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