The legal recognition of close-out netting provisions in financial contracts is increasingly significant to parties in the UAE, particularly as the region advances implementation of Basel III principles. The consequences of non-netting impacts a wide range of UAE market participants beyond financial institutions.
This briefing explores:
- The role of netting as a key tool to mitigate counterparty credit risk as recognised by international legislative bodies and trade associations
- Key elements of a legal framework to support netting enforceability
- Successes to date in UAE financial free zones where legal certainty on close-out netting have been achieved
- Market participants impacted by netting enforceability: a case for federal-level netting law.