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A Control Agreement lets a lender maintain secure control over financial assets held by a Swiss bank or securities intermediary as collateral. It creates a three-way relationship between the lender, the borrower, and the bank, giving the lender direct rights over the pledged accounts or securities.

Under Swiss banking law, these agreements are crucial for establishing valid security interests, especially in international financing deals. They protect lenders by preventing the borrower from accessing or moving the collateral without permission, while also clearly defining the bank's obligations to follow the lender's instructions about the secured assets.

Banks and lenders need Control Agreements when securing financial assets as collateral in Switzerland. These agreements become essential during loan transactions where the borrower pledges securities, cash accounts, or other financial instruments held by a Swiss bank as security.

The timing is critical - put the Control Agreement in place before the loan closes or when restructuring existing credit facilities. This protects the lender's security interest from day one and ensures compliance with Swiss banking regulations. It's particularly important in cross-border financing deals where foreign lenders need clear rights over Swiss-held collateral.

• Basic Account Control Agreement: Covers standard bank accounts and cash deposits, giving lenders direct control over the account balance and transactions
• Securities Control Agreement: Specifically designed for investment portfolios and securities accounts, addressing unique Swiss custody arrangements
• Multiparty Control Agreement: Used when multiple lenders or intermediaries are involved, common in syndicated loans under Swiss law
• Springing Control Agreement: Activates lender control only upon specific trigger events, maintaining operational flexibility until needed
• Foreign Currency Control Agreement: Tailored for accounts holding multiple currencies, addressing Swiss foreign exchange regulations

• Lenders/Secured Parties: Banks, financial institutions, or creditors who require control over collateral to secure their loans
• Swiss Banks/Custodians: Financial institutions holding the collateral accounts who must follow the agreement's instructions
• Borrowers/Account Holders: Companies or individuals pledging their financial assets as security for loans
• Legal Counsel: Swiss attorneys drafting and negotiating the agreements to ensure compliance with local banking laws
• Compliance Officers: Bank personnel monitoring adherence to the control arrangements and regulatory requirements

• Account Details: Gather complete information about the accounts being controlled, including account numbers and types
• Party Information: Collect legal names, addresses, and authorized representatives of the lender, borrower, and Swiss bank
• Collateral Scope: Define exactly which assets are covered and how they'll be controlled
• Notice Requirements: Specify communication protocols and response times for account instructions
• Bank Confirmations: Obtain written acknowledgment from the Swiss bank about their role and obligations
• Compliance Check: Verify alignment with Swiss banking regulations and security interest requirements

• Parties Section: Clear identification of lender, borrower, and Swiss bank with full legal names and addresses
• Account Definition: Precise description of controlled accounts and associated rights
• Control Mechanisms: Specific procedures for account access, instructions, and authentication methods
• Bank's Obligations: Detailed commitments regarding account management and instruction processing
• Default Provisions: Triggers and consequences of default under Swiss banking regulations
• Governing Law: Express choice of Swiss law and jurisdiction
• Termination Clauses: Clear conditions and procedures for ending the agreement

A Control Agreement differs significantly from a Credit Agreement in Swiss banking practice. While both documents relate to lending arrangements, they serve distinct purposes and operate differently under Swiss law.

• Primary Purpose: Control Agreements focus specifically on establishing lender control over collateral accounts, while Credit Agreements outline the broader terms of the loan itself
• Party Structure: Control Agreements require three parties (lender, borrower, and bank custodian), whereas Credit Agreements typically involve just lender and borrower
• Legal Scope: Control Agreements deal exclusively with account access and control rights, while Credit Agreements cover loan terms, repayment schedules, and general obligations
• Timing: Control Agreements often follow after Credit Agreements are in place, serving as security implementation tools rather than primary lending documents