Credit Default Swap Agreement Template for Switzerland

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Key Requirements PROMPT example:

Credit Default Swap Agreement

"I need a Credit Default Swap Agreement under Swiss law for a 5-year term starting March 2025, with physical settlement only and specific provisions for restructuring events, to be used between our bank and a major Swiss insurance company as protection seller."

Document background
This Credit Default Swap Agreement template is designed for use in the Swiss financial market when parties wish to enter into a credit derivative transaction under Swiss law. It is particularly relevant for financial institutions, investment firms, and corporations seeking to manage credit risk exposure or engage in trading credit derivatives. The document incorporates requirements from Swiss financial regulations, including FINMA guidelines and the Federal Act on Financial Market Infrastructures, while following international market practices. The agreement covers essential elements such as credit event definitions, settlement procedures, payment obligations, and regulatory compliance requirements. It is structured to accommodate both standardized and customized credit default swap transactions, with specific attention to Swiss regulatory requirements for OTC derivatives trading and risk management.
Suggested Sections

1. Parties: Identification of the protection buyer and protection seller, including their full legal names, registration details, and addresses

2. Background: Context of the agreement, relationship between parties, and general purpose of the CDS transaction

3. Definitions: Comprehensive list of defined terms used throughout the agreement, including credit events, reference obligations, and technical terms

4. Transaction Terms: Core economic terms including reference entity, notional amount, fixed rate, credit events covered, and term of the agreement

5. Payment Obligations: Details of premium payments, calculation periods, and settlement amounts

6. Credit Events: Specification of triggering events (bankruptcy, failure to pay, restructuring etc.) and their precise definitions

7. Notice and Settlement Provisions: Procedures for credit event notices, settlement methods, and timing requirements

8. Representations and Warranties: Standard declarations by both parties regarding their capacity, authority, and compliance

9. Obligations of the Parties: Ongoing duties including information provision, maintenance of authorizations, and compliance requirements

10. Term and Termination: Duration of the agreement, termination events, and early termination procedures

11. Dispute Resolution: Procedures for resolving disagreements, including jurisdiction and governing law provisions

12. General Provisions: Standard clauses including notices, amendments, assignment, and severability

Optional Sections

1. Credit Derivatives Determinations Committee: Include when parties agree to be bound by DC decisions for credit event determinations

2. Succession Events: Include when specific provisions for handling reference entity corporate actions are needed

3. Additional Termination Events: Include when parties agree on specific circumstances that trigger early termination

4. Physical Settlement Terms: Include when physical settlement is permitted as a settlement method

5. Multiple Holder Obligations: Include when restructuring provisions require multiple holder obligations

6. Reference Obligation Only Trade: Include when the CDS relates to a specific reference obligation only

7. Collateral Arrangements: Include when parties agree to post collateral under specific circumstances

Suggested Schedules

1. Schedule 1: Transaction Details: Specific terms of the CDS transaction including reference entity, notional amount, premium, term

2. Schedule 2: Notice Information: Detailed contact information for notices, including addresses, email, and authorized personnel

3. Schedule 3: Credit Support Terms: Details of any credit support or collateral arrangements between the parties

4. Appendix A: Reference Entity Information: Details about the reference entity, including key obligations and identification

5. Appendix B: Form of Credit Event Notice: Template for credit event notices and required supporting information

6. Appendix C: Settlement Terms: Detailed procedures for settlement following a credit event

7. Appendix D: Calculation Agent Provisions: Detailed responsibilities and procedures for the calculation agent

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Acceleration Obligation
Accreted Amount
Affiliate
Bankruptcy
Business Day
Calculation Agent
Calculation Period
Cash Settlement
Cash Settlement Amount
Credit Derivatives Determinations Committee
Credit Event
Credit Event Backstop Date
Credit Event Notice
Credit Event Resolution Request Date
DC Party
Default Requirement
Defaulted Credit
Deliver
Deliverable Obligation
Delivery Date
Effective Date
Eligible Transferee
Event Determination Date
Exercise Cut-off Date
Exercise Period
Failure to Pay
FINMA
Fixed Amount
Fixed Rate
Fixed Rate Payer
Fixed Rate Payer Calculation Period
Fixed Rate Payer Payment Date
Floating Rate Payer
Governmental Authority
Grace Period
Grace Period Business Day
Grace Period Extension Date
Interest Amount
ISDA Master Agreement
Loan
Market Value
Merger Event
Notice Delivery Period
Notice of Physical Settlement
Notifying Party
Obligation
Obligation Acceleration
Obligation Category
Obligation Characteristics
Payment
Payment Requirement
Permitted Currency
Physical Settlement
Physical Settlement Date
Physical Settlement Period
Potential Failure to Pay
Potential Repudiation/Moratorium
Premium
Protection Buyer
Protection Seller
Public Source
Reference Entity
Reference Obligation
Relevant City Business Day
Relevant Obligation
Repudiation/Moratorium
Restructuring
Scheduled Termination Date
Settlement Currency
Settlement Date
Settlement Method
Specified Currency
Succession Event
Successor
Swiss Business Day
Swiss Franc
Swiss Law
Term
Termination Date
Trade Date
Transaction
Valuation Date
Valuation Method
Valuation Time
Voting Shares
Clauses
Relevant Industries

Banking and Financial Services

Insurance

Investment Management

Securities Trading

Risk Management

Financial Technology

Asset Management

Corporate Banking

Investment Banking

Hedge Funds

Relevant Teams

Legal

Compliance

Risk Management

Trading

Operations

Credit Analysis

Documentation

Treasury

Regulatory Reporting

Portfolio Management

Middle Office

Settlements

Product Control

Relevant Roles

Derivatives Trader

Risk Manager

Legal Counsel

Compliance Officer

Credit Risk Analyst

Portfolio Manager

Trading Operations Manager

Chief Investment Officer

Structured Products Specialist

Financial Controller

Credit Derivatives Specialist

Treasury Manager

Chief Risk Officer

Documentation Specialist

Investment Analyst

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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