Credit support annex (CSA) - Financial definition
Financial acronyms
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Concise definition of the term credit support annex
A legal document which regulates the management of collateral between the counterparties in a transaction in financial derivatives.
Comprehensive definition of the term credit support annex
The CSA is an optional part of an ISDA master agreement. An ISDA master agreement may be signed without a CSA, however, the
inverse is not possible.
A CSA defines the terms or rules under which collateral is transferred between counterparties in order to mitigate the credit risk arising from
the derivative positions. It also determines the criteria that collateral must meet in order to be eligible (denomination currencies, credit quality)
as well as applicable haircuts.
In addition to that, it defines rules to be applied in case of disputes over the valuation of derivative positions.