Common use of Variation Margin Clause in Contracts

Variation Margin. (1) Central counterparties determine, on a daily basis, and on the basis of their Rules and Regulations, the net present value of each Contract accepted in their clearing systems, and, by taking into account the amount of collateral already posted, the amount of the collateral to be to be transferred (“Variation Margin”) as well as, and in relation to any Variation Margin already posted, the amount of collateral to be returned (“return of Variation Margin”) and also the party obligated to make the transfer. Where the central counterparty, through these calculations, determines that the Bank is obligated to post or to a return Variation Margin to the central counterparty, the Bank shall be entitled to demand payment of this same amount or to directly debit this amount from the account of the Contracting PartyCounterparty. Where the central counterparty is obligated to post or return Variation Margin to the Bank, the Bank shall payprovide this same amount to the Contracting PartyCounterparty or credit this amount to its account. (2) The timeframe within which Variation Margin must be posted may, depending upon the individual case, be set in hours – for example, where market prices are subject to rapid fluctuation. Should the Contracting PartyCounterparty fail to meet such demand to settle the negative balance, such demand to be made by telephone, fax, e-mail, in text form or any other electronic format agreed upon with the Bank, the provisions of Section 2 paragraph (4) shall apply correspondingly. ▪ Modifications: Modernisation of provision concerning formal requirements for declarations (text form), as regards text form concept under German law, see comments in DRV-2018-background paper. (3) The parties may agree that the variation of the present value determined in accordance with paragraph 1 can also be settled by way of debiting or crediting the determined amounts to the account of the client (“Settled-to-Market-Variation Margin”). ▪

Variation Margin. (1) Central counterparties determine, on a daily basis, and on the basis of their Rules and Regulations, the net present value of each Contract accepted in their clearing systems, and, by taking into account the amount of collateral already posted, the amount of the collateral to be to be transferred (“Variation Margin”) as well as, and in relation to any Variation Margin already posted, the amount of collateral to be returned (“return of Variation Margin”) and also the party obligated to make the transfer. Where the central counterparty, through these calculations, determines that the Bank is obligated to post or to a return Variation Margin to the central counterparty, the Bank shall be entitled to demand payment of this same amount or to directly debit this amount from the account of the Contracting PartyCounterparty. Where the central counterparty is obligated to post or return Variation Margin to the Bank, the Bank shall payprovide this same amount to the Contracting PartyCounterparty or credit this amount to its account. (2) The timeframe within which Variation Margin must be posted may, depending upon the individual case, be set in hours – for example, where market prices are subject to rapid fluctuation. Should the Contracting PartyCounterparty fail to meet such demand to settle the negative balance, such demand to be made by telephone, fax, e-mail, in text form or any other electronic format agreed upon with the Bank, the provisions of Section 2 paragraph (4) shall apply correspondingly. ▪  Modifications: Modernisation of provision concerning formal requirements for declarations (text form), as regards text form concept under German law, see comments in DRV-2018-background paper. (3) The parties may agree that the variation of the present value determined in accordance with paragraph 1 can also be settled by way of debiting or crediting the determined amounts to the account of the client (“Settled-to-Market-Variation Margin”). ▪