Collateralisation meaning

Regulatory Technical Standards (RTS) on Settlement Discipline The European Securities and Markets Authority (ESMA) has issued its final report proposing amendments to the Regulatory Technical Standards on Settlement Discipline, designed to improve settlement efficiency across the EU and help the shift to a shorter settlement cycle (T+1) by...

This Practice Note sets out the core concepts and issues concerning ETDs, including: what ETDs are and how they operate how ETDs mitigate counterparty risk via clearing and collateralising trades how ETDs are traded and matched on a regulated exchange how ETDs are given-up for clearing, and how collateral is managed For more information on the differences between OTC derivatives and ETDs, see Practice Notes: OTC and exchange traded derivatives—key features and concepts and OTC and exchange traded derivatives—documentation. What are exchange traded derivatives? ETDs are derivative contracts entered into through a regulated exchange (the Exchange). The Exchange functions as a market mechanism that enables the exchange of offsetting derivative positions. It offers a venue where a relatively narrow range of futures and options is traded on standard terms. To be traded and matched on the Exchange, contracts must carry highly standardised terms and conditions. Unlike often bespoke OTC derivative contracts, ETDs are generally inflexible regarding the selection...

What does this Practice Note cover? This Practice Note outlines the key legal, regulatory and contractual considerations relevant to crypto derivatives in the UK, with particular emphasis on property treatment, collateralisation, standardisation through ISDA, and the UK regulatory framework. Its principal focus is on derivatives that reference native cryptoassets, such as Bitcoin and Ether. Traded on liquid, decentralised markets, these instruments display marked price volatility. These traits generate strong market incentives for trading and speculation, while also fuelling demand for hedging tools to manage price risk and facilitate price discovery. Together, these forces have driven the development of standardised derivatives markets built around these assets. What are crypto derivatives? Crypto derivatives are financial contracts whose value is derived from an underlying digital (or crypto) asset. In practice, most such products reference specific ‘cryptoassets’—for example, Bitcoin or Ether—though the same principles can extend to other digital representations of value used as underlying assets. The terms ‘digital asset’ and ‘cryptoasset’ are often used interchangeably. The term ‘digital asset’ is...

This Practice Note outlines the principal deal structures for bond issues, private placements and loan facilities used in social housing finance in England. For further information on social housing finance transactions, see the following Practice Notes: Social housing entities entering into finance transactions The key financing terms in social housing finance Taking and enforcing security from social housing entities This Practice Note concentrates solely on private not-for-profit providers of social housing registered in England, referred to here as ‘RPs’, as they account for the overwhelming majority of private debt finance raised to date by housing associations. It does not address providers of social housing registered in Wales. Social housing finance—typical funding principles In most cases, social housing finance is arranged as general corporate funding rather than funding earmarked for a particular project or development. Security is typically taken over social housing assets, although this is not universal. In recent years, a number of transactions have involved the raising of unsecured...