SAUDI ARABIA JOINS GLOBAL FRAMEWORK FOR CLOSE-OUT NETTING

RIYADH, Saudi Arabia, Nov 11 (Bernama) -- The International Swaps and Derivatives Association (ISDA) has published its legal opinions that recognize the enforceability of close-out netting in Saudi Arabia, a move that provides global financial institutions with greater legal certainty when transacting in the Kingdom’s Derivatives Market. The decision follows the Capital Market Authority’s (CMA) issuance of the (Close-out Netting and related Collateral Arrangements Regulation) this year.

Close-out netting allows counterparties in a qualified financial contract to offset their obligations if one party defaults, leaving only a single net payment due. Thus, reducing systemic risk and ensures the orderly settlement of contracts. Additionally, its enforceability determines whether international investors can manage their exposures efficiently.