On Close-Out Netting (2025)

Transnational Securities Law (2nd Edition)

Thomas Keijser (ed.)

Published:

2022

Online ISBN:

9780191945670

Print ISBN:

9780192855510

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Transnational Securities Law (2nd Edition)

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Thomas Keijser

Thomas Keijser

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Pages

60–91

  • Published:

    March 2022

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Keijser, Thomas, 'On Close-Out Netting', in Thomas Keijser (ed.), Transnational Securities Law, 2nd Edition (2022; online edn, Oxford Academic), https://doi.org/10.1093/law/9780192855510.003.0003, accessed 19 Aug. 2024.

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Abstract

This chapter describes the various forms that close-out netting may take, including common characteristics and distinctive features of three types of close-out netting. It recounts the widespread use of novel close-out netting provisions that led to uncertainty about their effectiveness under various national systems of law. It also talks about the Model Netting Acts (MNAs) promulgated by the International Swaps and Derivatives Association (ISDA), which is considered prominent among the initiatives directed at netting legislation. The chapter recounts the secular ‘netting-friendly’ trend prior to the global financial crisis that has not yet been reversed in recent years. It points out how internationally accepted resolution principles acknowledge that unconstrained close-out netting increase rather than mitigate systemic risks.

Keywords: Close-out netting

Subject

Financial Law Insolvency Law Banking Law Capital Markets

Collection: Financial Banking Law

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