The Saudi Central Bank recently introduced the Close-out Netting and Related Financial Collateral Regulation, effective February 17, enhancing netting agreement enforceability. This change is expected to significantly reduce risks and bolster confidence in financial transactions, aligning with Saudi’s Vision 2030 goals. Industry associations will publish legal opinions to further support cross-border transactions.
On February 19th, a notable joint association conference convened in Riyadh, Saudi Arabia, organized by the International Swaps and Derivatives Association (ISDA), the International Securities Lending Association (ISLA), and the International Capital Market Association (ICMA). This gathering is significant due to the recent introduction of the Close-out Netting and Related Financial Collateral Regulation by the Saudi Central Bank (SAMA) on February 17th. This regulation enhances the enforceability of netting agreements and financial collateral arrangements with entities under SAMA’s supervision, particularly during a counterparty’s failure.
The new netting regulation by the Saudi Central Bank marks a pivotal shift in financial transactions within Saudi Arabia, fostering greater confidence and stability in cross-border dealings. As associations prepare to publish supportive legal opinions, market participants are poised to engage in expanded financial activities. This development aligns with the objectives of Saudi Arabia’s Vision 2030, intending to enhance its stature as a global investment hub.
Original Source: natlawreview.com
