Argaam, 3 July 2025: The Saudi Capital Market Authority (CMA)’s board has approved new regulations on close-out netting and associated collateral arrangements, in order to streamline netting agreements and financial collateral dealings where a capital market institution is a participant.

The regulation’s primary purpose is to enhance financial system stability and protect investors by ensuring qualified financial contracts involving capital market institutions remain binding in the event of a default by either party. The regulations have been designed to secure all parties’ rights, under a netting agreement’s terms, providing a robust framework for addressing defaults.

It includes procedural guidelines for default situations in netting agreements and other specified scenarios when one involved party is a capital market entity. The framework concentrated on regulating these agreements and collateral arrangements tied to qualified financial contracts under CMA’s jurisdiction, ensuring their enforceability even amidst changes to initial contract conditions.

The regulations included several provisions, defining key terms, outlining financial collateral arrangements, specifying the scope, and identifying the entities affected.

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