Securities Account Control Agreement

Summary

This securities account control agreement precedent is used to perfect a lender's security interest in a borrower's financial assets held in a securities account. The intermediary or bank that maintains the securities account agrees to comply with the secured lender's instructions regarding the account upon a default under the underlying credit facility. This precedent includes practical guidance and drafting notes. A securities account control agreement is entered into as part of a suite of loan documents to allow the secured party to take control of the account upon a default under the underlying credit facility, after which the intermediary will no longer follow instructions originating from the borrower, which is assumed to hold the account. Agreement terms should reflect the entity holding the account, if not the borrower. This precedent should be used primarily for reference as each intermediary will have a preferred form of securities account control agreement. For additional ...