Common Contracts
1 similar Collateral Management Agreement contracts
Collateral management agreement pdfCollateral Management Agreement • December 16th, 2020
Collateral Management Agreements (CMA) regulate how goods pledged to a financial institution as collateral against a loan or remain the property of the original seller are stored, tested and released in accordance with specific instructions. These commodities, collateral, can more or less be anything, but usually include metals, a wide range of soft goods and, of course, petroleum products. Where physical goods are held under a Collateral Management Agreement, they are often in the hands of a third party and not directly under the control of a bank or commodity trader. In practice, the physical distance between the owner, the buyer and the goods themselves creates an environment in which the possibility of embezzlement, fraud and theft could arise. When goods are on the other side of the world, in a storage facility you've never seen, how can you ensure that the Collateral Manager meets his obligations? How can you know the goods are still where they are supposed to be and in a marketa
