The code identifying the exposure type or collateral reason in the user header of the message (block 3) must be identical to the code contained in field :22a::COLA//xxxx (Exposure Type Indicator) in sequence A of the message content (text block 4).
A collateral status and processing advice can be sent:
At initiation time:
When the initiative is taken by the taker, a collateral claim is sent asking the giver to post collateral. The claim provides the exposure amount and the value of collateral required. The taker can also include the details of the collateral he wants.
If the giver doesn't know which collateral he will post when he receives the claim, he sends then a response stating that he agrees with the claim and will propose collateral later.
If the giver does not agree with the claim and sends a response message to the taker stating the reason for not agreeing
When the initiative is taken by the giver, a collateral proposal is sent to the taker containing the details of the proposed collateral together with the exposure amount and the value of collateral required.
The taker agrees by sending a response message to the giver and awaits the settlement of the collateral.
Or the taker does not agree and sends a message stating the reason for not agreeing.
When a new exposure is created by a variation in the value of the exposure, in the value of the collateral or in both values, the parties can do a valuation calculation and send a collateral and exposure statement.
The taker will send a claim for additional collateral to be posted by the giver, when the exposure from the taker vis-à-vis the giver increases.
If the giver doesn't know which collateral he will post when he receives the claim, he sends a response stating that he agrees with the claim and propose collateral later.
If the giver does not agree with the claim, he sends a response message to the taker stating the reason for not agreeing.
The giver will send a collateral claim containing the details of the collateral to be returned, when the exposure from the taker vis-à-vis the giver decreases, The taker agrees by sending a response message to the giver and awaits the settlement of the collateral. Or the taker does not agree and sends a message stating the reason for not agreeing.
When termination occurs, the exposure between the parties has disappeared completely. This happens for instance when a trade has reached maturity or when parties have decided to stop trading altogether or when an institution pulls out of a clearing system. The giver will send a message claiming all posted collateral. The taker will send a response confirming his agreement or disagreement.
A response can be sent to a collateral substitution proposal to the receiver confirming the agreement or the disagreement of the sender of the response to the substitution proposal.
