Acceptance Collateral Sample Clauses
The Acceptance Collateral clause defines the requirements and conditions under which collateral provided by one party is deemed acceptable by the other party in a contractual relationship. Typically, this clause outlines the types of assets or securities that qualify as collateral, the standards they must meet, and the process for evaluating or substituting such collateral. For example, it may specify that only government bonds or cash deposits are acceptable, and set criteria for their valuation. The core function of this clause is to ensure both parties have a clear understanding of what constitutes valid collateral, thereby reducing disputes and managing credit risk effectively.
Acceptance Collateral. Each Draft accepted by the Bank shall be secured by a security interest in the goods (as defined in the California Uniform Commercial Code) involved in the transaction out of which the Acceptance arose to the extent that such a security interest is either required by the Bank or in order that the relevant Acceptance conform to the requirements of Section 13 of the Federal Reserve Act.