Account Control Agreements (With Jack Pearson)

What is an ACCA, and how does it fit into the financial contract infrastructure that we're familiar with?

Uh, thanks.

So an ACCA stands for account control agreement, obviously, like you said.

Uh, the main part there being control.

And it's a tri-party agreement.

Uh, you have your custodian, your, uh, pledger or charger, and your secured party.

The custodian will hold the collateral for the secured party's benefit at, on behalf of the pledger.

Uh, this is because for whatever reason they can't post the money directly to the secured party, you employ this third party who will do that on your behalf.

And ultimately it's all about the movement of money between the three parties, um, when the secured party can look at the collateral, how they can monitor it, uh, and when the pledger pays in that collateral, how much it is, any custodian fees, anything like that.

Um, and without that ACCA, in substance it sits beside your ISDA and your CSA as your, like, third agreement to supplement your initial ISDA, and without that you don't have any security interest over that custodian's money because it's holding it, right, rather than holding it yourself.

Great.

Thank you.