ISDA extends Saudi Arabia netting opinions
03 November 2025 Saudi Arabia
Image: Abdul/stock.adobe.com
The International Swaps and Derivatives Association (ISDA) has extended its netting opinions for Saudi Arabia to cover regulations published by the Capital Market Authority (CMA) earlier this year that recognise the enforceability of close-out netting.
The regulations were published in July and follow similar rules published by the Saudi Central Bank (SAMA) in February.
The CMA regulations apply if at least one party is a capital market institution supervised by the CMA, including dealers and investment managers.
Both the CMA and SAMA rules are closely based on ISDA鈥檚 2018 Model Netting Act.
ISDA published netting opinions under the SAMA regulations in June, with one under the ISDA Master Agreement and one for Islamic derivatives under the ISDA/International Islamic Financial Market Tahawwut Master Agreement.
Riyadh-based law firm STAT was commissioned by ISDA to draft the netting opinions.
ISDA is also developing collateral opinions under both regulations, which will be published before the end of the year.
Scott O鈥橫alia, ISDA鈥檚 chief executive, states: 鈥淭hanks to this important step by CMA, ISDA鈥檚 netting opinions now make clear that netting is enforceable for trades with any Saudi financial counterparty, whether an investment manager supervised by the CMA or a bank regulated by SAMA.
鈥淭his is a big step in the further development of Saudi Arabia鈥檚 financial markets, and we would like to thank the CMA for its constructive engagement with ISDA and the industry throughout the development and consultation process.鈥�
The regulations were published in July and follow similar rules published by the Saudi Central Bank (SAMA) in February.
The CMA regulations apply if at least one party is a capital market institution supervised by the CMA, including dealers and investment managers.
Both the CMA and SAMA rules are closely based on ISDA鈥檚 2018 Model Netting Act.
ISDA published netting opinions under the SAMA regulations in June, with one under the ISDA Master Agreement and one for Islamic derivatives under the ISDA/International Islamic Financial Market Tahawwut Master Agreement.
Riyadh-based law firm STAT was commissioned by ISDA to draft the netting opinions.
ISDA is also developing collateral opinions under both regulations, which will be published before the end of the year.
Scott O鈥橫alia, ISDA鈥檚 chief executive, states: 鈥淭hanks to this important step by CMA, ISDA鈥檚 netting opinions now make clear that netting is enforceable for trades with any Saudi financial counterparty, whether an investment manager supervised by the CMA or a bank regulated by SAMA.
鈥淭his is a big step in the further development of Saudi Arabia鈥檚 financial markets, and we would like to thank the CMA for its constructive engagement with ISDA and the industry throughout the development and consultation process.鈥�
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