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Find out moreWelcome to this edition of Law Update, where we focus on the ever-evolving landscape of financial services regulation across the region. As the financial markets in the region continue to grow and diversify, this issue provides timely insights into the key regulatory developments shaping banking, investment, insolvency, and emerging technologies.
2025 is set to be a game-changer for the MENA region, with legal and regulatory shifts from 2024 continuing to reshape its economic landscape. Saudi Arabia, the UAE, Egypt, Iraq, Qatar, and Bahrain are all implementing groundbreaking reforms in sustainable financing, investment laws, labor regulations, and dispute resolution. As the region positions itself for deeper global integration, businesses must adapt to a rapidly evolving legal environment.
Our Eyes on 2025 publication provides essential insights and practical guidance on the key legal updates shaping the year ahead—equipping you with the knowledge to stay ahead in this dynamic market.
The Saudi Central Bank (SAMA) has issued a new regulation titled “Close-out Netting and Related Financial Collateral Regulation” (the “Netting Regulation”) The Netting Regulation, effective from the 17th of February 2025, establishes a comprehensive framework for the enforceability of Netting Agreements and related Financial Collateral Arrangements, particularly in the context of bankruptcy proceedings. SAMA has issued the Netting Regulation pursuant to Article 214 of the Bankruptcy Law determining the contracts and transactions that are exempted from the provisions, of the Bankruptcy Law especially the restrictions on set-off.
The Netting Regulation applies to Netting Agreements and related Financial Collateral Arrangements connected with one or more Qualified Financial Contracts. These contracts must involve at least one party under SAMA’s supervision.
The Netting Regulation defines some key terms including
The primary objective is to ensure the enforceability of Netting Agreements and related Financial Collateral Arrangements both outside and within bankruptcy proceedings.
The Netting Regulations provide for:
Enforceability Provisions
General Provisions
The new regulation by SAMA provides a robust legal framework for the enforceability of Netting Agreements and Financial Collateral Arrangements, offering greater certainty and protection for parties involved in Qualified Financial Contracts. Entities under SAMA’s supervision should review their existing agreements and ensure compliance with the new regulation to benefit from its provisions.
If you have any questions or require further information on the new law or its implications for your business, please contact Rafiq Jaffer, Partner (r.jaffer@tamimi.com), Ambreen Bidiwala, Senior Counsel (a.bidiwala@tamimi.com) or Madhurima Basu, Senior Counsel (M.basu@tamimi.com).
Partner, Banking & Finance (Bahrain, KSA & UAE) Head – Debt Capital Markets
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