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Credit Support Agreement Template for Denmark

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Credit Support Agreement

Document background
The Credit Support Agreement is essential for financial market participants operating under Danish law who need to manage counterparty risk in their financial transactions. This document is typically used in conjunction with master trading agreements or standalone financial arrangements where collateral needs to be posted and managed. It details the operational and legal framework for collateral transfers, valuation, and enforcement, ensuring compliance with Danish financial regulations and the EU Financial Collateral Directive. The agreement is particularly crucial in derivatives trading, securities lending, and other financial transactions where parties need to secure their exposures. It incorporates specific Danish legal requirements while maintaining alignment with international market practices, making it suitable for both domestic and cross-border transactions.
Suggested Sections

1. Parties: Identification of the parties entering into the agreement, including their full legal names, registration numbers, and addresses

2. Background: Context of the agreement, reference to any master agreement, and purpose of the credit support arrangement

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms, calculation methodologies, and specific Danish law concepts

4. Credit Support Obligations: Core provisions detailing the obligations to provide credit support, including transfer timing and conditions

5. Valuation and Calculations: Methods for calculating exposure, collateral value, and margin requirements

6. Transfer Timing and Conditions: Specific requirements and timeframes for transferring collateral, including delivery methods

7. Custody and Rights: Provisions regarding holding of collateral, voting rights, and income payments

8. Events of Default: Circumstances constituting default and consequences thereof

9. Representations and Warranties: Standard and specific representations by each party regarding capacity, authority, and compliance

10. Tax Provisions: Treatment of tax matters related to collateral transfers and income

11. Governing Law and Jurisdiction: Explicit choice of Danish law and jurisdiction provisions

Optional Sections

1. Interest Provisions: Optional section for when interest is to be paid on cash collateral

2. Eligible Collateral Schedule: Optional section when multiple types of collateral are acceptable and need specific treatment

3. Third Party Security Provider Provisions: Required when collateral may be provided by entities other than the primary counterparty

4. Special Danish Law Provisions: Additional provisions specific to Danish law requirements when dealing with certain types of entities or collateral

5. Dispute Resolution: Optional detailed dispute resolution procedures beyond standard jurisdiction clause

6. Agency Provisions: Required when any party is acting as agent for other entities

Suggested Schedules

1. Schedule 1 - Eligible Collateral: Detailed list of acceptable collateral types and associated valuation percentages

2. Schedule 2 - Transfer Specifications: Details of bank accounts, securities accounts and transfer procedures

3. Schedule 3 - Valuation Procedures: Detailed procedures for valuing different types of collateral

4. Schedule 4 - Contact Details: List of authorized persons and contact information for notices and transfers

5. Appendix A - Forms of Notice: Standard forms for margin calls, transfer notices and other communications

6. Appendix B - Custody Arrangements: Detailed procedures for holding and managing collateral

7. Appendix C - Tax Documentation: Required tax forms and procedures for tax-related matters

Authors

Relevant legal definitions
























































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Relevant Industries
Relevant Teams
Relevant Roles
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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