101600 – Financial Accounts: Custodial Accounts: Collateral

Collateral accounts are accounts which are maintained for the benefit of another, or arrangements under which an obligation exists to return cash or assets to another.

Transactions that include the collection of margin or collateral on behalf of a counterparty may fall within the definition of Custodial Account. The exact terms of the contractual arrangements will be relevant in applying this interpretation. However, if the collateral is provided on a full title transfer basis so that the collateral holder becomes the full legal and beneficial owner of the collateral during the term of the contract, this will not constitute a Custodial Account for the automatic exchange agreements.