Collateral Definition

GLOSSARY

What does Collateral mean?

Assets put up as security to protect a tender in case the borrower defaults.

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Bank Recovery and Resolution Directive (BRRD)—timeline [Archived]

Bank Recovery and Resolution Directive (BRRD)—timeline [Archived] Archived:This timeline has been archived. For developments from January 2024 onwards, see EU Bank Recovery and Resolution Directive—timeline if they relate to the EU BRRD, or UK bank recovery and resolution regime—timeline if they relate to the UK bank recovery and resolution regime, For further guidance on the EU BRRD, see Practice Note: Bank Recovery and Resolution Directive (BRRD)—essentials. For further guidance on the UK bank recovery and resolution regime, see Practice Note: The UK bank recovery and resolution regime. Date Source Document Description 20 December 2023 European Banking Authority The EBA publishes amendments to disclosures and reporting on MREL and TLAC The European Banking Authority (EBA) has published its final draft implementing technical standards (ITS) on amendments to disclosure and reporting of the minimum requirement for own funds and eligible liabilities (MREL) and the total loss absorbency requirement (TLAC). The amendments reflect the new requirement to deduct investments in eligible liabilities instruments of entities belonging to the same resolution group, the...

Contractor steps to take if employer becomes insolvent—checklist

Contractor steps to take if employer becomes insolvent—checklist This Checklist sets out a number of practical steps that a contractor should consider taking where the employer becomes insolvent during a construction project. This Checklist assumes that the employer has entered into a written contract with a main contractor for construction works which are not yet complete, and that the contractor has engaged sub-contractors. It assumes that it is not a PFI project. The actions to be taken in any specific situation will of course depend on the terms of the contract(s) between the parties and the status of the works at the time of the employer's insolvency, but this Checklist is intended to provide a starting point for the contractor to consider. For guidance on how to spot potential problems with solvency and how to protect the contractor’s position at the outset of a project, see Practice Note: Construction insolvency—how to spot problems and how to protect yourself—contractors. In the event that the employer has become insolvent, the contractor needs...

Longevity swaps

Pension schemes and their sponsoring employers are faced with a number of risks in relation to their defined benefit pension schemes, a significant one of which is that of paying for increasing life expectancy.Traditional methods of hedging pension scheme risk, such as buy-outs or buy-ins, have been joined with de-risking solutions based on a ‘swap’ contract. A ‘swap’ is generically used to describe for a contract under which the parties exchange a series of cashflows linked to some underlying asset or other variable.For further information on buy-outs and buy-ins, see Practice Note: De-risking—pension buy-outs and buy-ins.What is a longevity swap?A longevity swap is one way for a pension scheme to hedge the risk that pensioners live longer than expected. This may be by way of derivative or insurance policy. Longevity swap contracts operate by requiring the pension scheme trustees to make pre-determined regular payments (typically monthly or quarterly) to the swap provider for a fixed period of time modelled on then life expectancy in respect of specified pensioners. In return,...

The prescribed part under section 176A of the Insolvency Act 1986

The prescribed part under section 176A of the Insolvency Act 1986 What is the prescribed part? When does the prescribed part apply? When an insolvency office-holder is appointed, their primary role is to collect in and realise the company’s assets in order to distribute them to creditors and shareholders according to the statutory order of payments, also known as the waterfall of payments. See: Order of payments—overview. The prescribed part was introduced by the Enterprise Act 2002 as part of a package of major reforms to the corporate insolvency regime. It created a new section 176A of the Insolvency Act 1986 (IA 1986). IA 1986, s 176A applies where a company has granted a floating charge on or after 15 September 2003 and gone into one of the following insolvency procedures: • liquidation • administration • provisional liquidation • receivership In these insolvency procedures, the office-holder is required to set aside a portion (a ‘prescribed part’) of the company’s ‘net property’ to be available in...

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Net contribution clauses (collateral warranty)

Net contribution 1

Loss payable clause: for hull and machinery insurance in shipping finance

It is noted that, by an assignment in writing collateral to a first preferred mortgage dated [insert date] (the Mortgage) [Name of Owner] of [Address of Owner] (the Owner), owner of the vessel '[Name of Vessel]' (the Vessel), assigned absolutely to [Name of Mortgagee] acting through its branch at [Address of Mortgagee] (the Mortgagee), the benefit of this policy of insurance and all benefits of this policy, including all claims of any nature (including return of premiums) hereunder. Claims payable under this policy in respect of a total or constructive total or an arranged or agreed or compr

Dive into our 229 Precedents related to Collateral

What is motor vehicle or road traffic accident insurance?

What is motor vehicle or road traffic accident insurance? In the UK, motor insurance is a mandatory insurance policy for any vehicle owner or driver unless the vehicle is declared as off the road. There are heavy penalties, both civil and criminal, for uninsured drivers (who are caught). The mandatory insurance regime is intended to protect the general public (including pedestrians and other non-vehicle users) against personal injury and damage caused in a road traffic accident. Types of motor insurance policies The motor insurance market is split into three main types of insurance: third-party only; third-party fire and theft; and comprehensive policies: • third-party only policies provide the minimum level of cover required by the law, namely the Road Traffic Act 1988 (RTA 1988). RTA 1988 mandates that motor insurance must at the very least cover the risk of death, personal injury or property damage to third parties caused by the insured vehicle • third-party fire and theft provides third-party cover as described above but in addition...

How could the funder of a ‘first purchaser’ of a construction development obtain rights against the construction/design team?

How could the funder of a ‘first purchaser’ of a construction development obtain rights against the construction/design team? It is standard market practice for warranties to be provided by the construction/design team to the following beneficiaries: • funder of the development • any first purchaser of the whole or a substantial part • any first tenant of the whole or a substantial part • employer (if the warrantor is a consultant or sub-contractor) • freeholder Where a purchaser is the 'first' purchaser from the employer/developer, a typical construction contract will provide, therefore, that the first purchaser will be entitled to receive a collateral warranty equivalent (ie on the same terms) to that given to the employer/developer, from the same contractor/consultant/sub-contractor. Any other beneficiaries not listed above, ie the funder of a first purchaser, would be considered unusual and the warrantor would be likely to resist providing any such additional warranty (although the funder could always request one, the warrantor may agree). See: Collateral warranties—checklist. This differs to the...

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Modernising UK trade settlement standard the road ahead

Law360, Expert Analysis: The Accelerated Settlement Taskforce is currently examining a potential migration by the UK from a so-called T+2 to a T+1 settlement standard, ie, reducing the time it takes for securities transactions to settle, having published their initial views in March 2024. Against this context, and in anticipation of a further report by the taskforce confirming implementation details to be delivered by the end of 2024, Andrew Tsang, associate, and Tom Bacon, partner, at Bryan Cave Leighton Paisner LLP consider the rationale of adopting a new settlement standard plus any challenges, as well as the potential role of distributed ledger technology.

Banking and Finance weekly highlights—17 October 2024

This week's edition of Banking and Finance weekly highlights includes: (1) Analysis on the Standard Chartered case looking at what rate was appropriate following the cessation of synthetic USD LIBOR; (2) the publication by the Climate Financial Risk Forum of its nature-related risk handbook and technical data guidance; and (3) the announcement by the government of its intention to implement reforms to the operation of the ring-fencing regime in order to improve the competitiveness of the UK banking sector.

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GLOSSARY