Regulatory Alerts2025-07-03
Close-out Netting and related Collateral Arrangements Regulation
The Capital Market Authority of Saudi Arabia has issued this Regulation to govern Netting Agreements and Financial Collateral Arrangements linked to Qualified Financial Contracts under its supervision. The rules ensure that netting provisions remain fully enforceable during bankruptcy proceedings, limiting the powers of bankruptcy trustees and commissions to stay or avoid these agreements while clarifying collateral realization and multibranch netting calculations. By aligning with the Capital Market Law and Bankruptcy Law, the Regulation establishes clear frameworks for determining global versus local net payment obligations, thereby reducing legal uncertainty and systemic risk for market participants.
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