The process and documentation for opening an Escrow Shield Plus account and a typical escrow account at a bank are similar. With a bank, parties select an investment option such as a Money Market Deposit Account (MMDA) or Money Market Fund (MMF). With Escrow Shield Plus, the parties elect to invest the funds in an insured, collateralized separate account via a funding agreement, the Escrow Shield Plus Agreement (described below).
There are two key documents:
Escrow Shield Plus Agreement – this is similar to the investment election form for a traditional escrow deposit, and it states the terms applicable to the product. This product has been registered with the U.S. Securities and Exchange Commission (SEC). As such, terms are not subject to negotiation, as would be the case for investment options elected for traditional escrows. The agreement offers a competitive crediting rate (interest rate) and is collateralized by a separate account that holds the invested funds. The crediting rate may change under limited, defined circumstances.
Escrow Administration Agreement – this agreement covers the terms of the account administration and is similar to the traditional Escrow Agreement. This covers topics such as joint instructions, notices, indemnification, statements, etc. Terms are negotiable, and the agreement is signed by Buyer, the Shareholder Representative and Acquiom Clearinghouse LLC as the escrow administrator.
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Posted in: Services: Escrow Shield Plus