You don’t need to be told that new trading relationships may involve lengthy negotiations and extensive documentation work. This is no ordinary repapering exercise though: this time around you’ll need to agree to new collateral and trading documents with every counterparty with which you trade derivatives.
Your key steps:
Agree Legal Documentation
- Start work early to familiarize yourself with the various legal agreements you will need, from custody agreements and account control agreements to eligible collateral schedules.
- Negotiate documents with counterparties simultaneously to save time and prevent duplication.
- Partner with a collateral manager if you have many bilateral trading partnerships to renegotiate.
- Start the papering process as soon as possible.
- You’ll be at the heart of negotiating collateral schedules with counterparties – familiarize yourself with the benefits of online schedule managers like RULE.