ISDA updated its Model Netting Act, which provides model legislation for jurisdictions that are considering enacting statutes protecting close-out netting.
The 2018 Model Netting Act and Guide sets out the model legislation and provides a thorough explanation of its terms. The purpose of enacting such legislation is to provide legal certainty that parties to derivatives transactions can exercise their contractual rights to close out those transactions upon the default of the counterparty, including its insolvency.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.