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IS THERE ANY DIFFERENCE BETWEEN DOCUMENTATION AND COLLATERAL?
Collateral management is a process. It helps to reduce counterparty credit exposures. It is normally used with over-the-counter derivatives like swaps and options. If two parties agree to enter into collaterisation this is what happens.

    The two parties negotiate and execute a collateral support document, (CSD), this contains the terms and conditions under which collateralisation will take place.
    The trades subject to collateral are regularly marked-to-market. Their net valuation is then agreed.
    The party with the negative MTM on the trade portfolio delivers collateral to the party with the positive MTM.
    As prices move and new deals are added the valuation of the trade portfolio will change.
    Depending on what is agreed the valuation is repeated at frequent intervals-typically daily, weekly or monthly.
    The collateral position is then adjusted to reflect the new valuation. The process continues unless one of the parties defaults.
Documentation may include

    written information for any read, projection or technical performing,
    data media of any format and for any reproduction,
    other content.

Common types of documentation include user guides, white papers, on-line help, quick-reference guides. It is less common to see hard-copy (paper) documentation. Documentation is distributed via websites, software products, and other on-line applications.


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