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Find out moreThis comprehensive guide is designed to help you navigate the intricate landscape of family business and private wealth in the Middle East, where family businesses constitute approximately 60% of GDP and employ 80% of the workforce in the GCC, offering unparalleled opportunities for wealth creation and preservation.
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Read NowIn a much-awaited development the Saudi Central Bank (“SAMA“) has issued its draft netting and related collateral arrangements regulations (“Netting Regulations”) to banks in the Kingdom of Saudi Arabia (“KSA“) for comments. Banks in KSA have submitted their comments to SAMA and the final version of the Netting Regulations are expected to be issued soon. The Netting Regulations will be issued by SAMA pursuant to its powers under Article 4 of The Saudi Central Bank Law issued by Royal Decree No (M/36) dated 11/04/1442H and Articles 229 and 214 of the Bankruptcy Law issued by Royal Decree No. (M/50) dated 28/05/1439H.
Under the Bankruptcy Law, once bankruptcy proceedings have commenced, it may not be possible to set-off or net the relevant obligations across different and unrelated transactions. However, Article 214 of the Bankruptcy Law, states that with a view to maintaining the financial order and stability, arrangements relating to guarantees and set-off involving “financial transactions” are excluded from the Bankruptcy Law. The implementing regulations of the Bankruptcy Law stipulate that the “financial transactions” to be excluded from the Bankruptcy Law are to be determined by SAMA, together with the Capital Markets Authority and the Ministry of Commerce and Investment. The draft Netting Regulations now permits netting once bankruptcy procedures have commenced and broadly aligns to ISDA’s model netting law.
Al Tamimi & Company is well-equipped to assist with the recent developments regarding the Saudi Netting Regulations. To access our expertise and guidance, please don’t hesitate to reach out to our dedicated team below.
Partner, Banking & Finance (Bahrain, KSA & UAE) Head – Debt Capital Markets
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