Document background
The Credit Support Agreement is essential in Swiss financial markets for managing counterparty credit risk in various financial transactions. It is typically used in conjunction with master trading agreements or standalone financial arrangements where parties need to establish a formal collateral relationship. The document becomes particularly relevant in the context of Switzerland's role as a major financial center, where sophisticated financial institutions and corporate entities regularly engage in collateralized trading activities. The agreement must comply with Swiss financial regulations, including FINMA requirements and the Federal Act on Financial Market Infrastructures, while also considering international best practices. It provides detailed mechanisms for calculating exposure, managing collateral transfers, and handling default scenarios, all within the framework of Swiss law.
