Saudi Central Bank issues close-out netting and related collateral arrangements regulations with immediate effect

The Saudi Central Bank (SAMA) has issued the Close-out Netting and Related Collateral Arrangements Regulations for institutions under its supervision, establishing rules for close-out netting agreements and related financial collateral arrangements in the Kingdom of Saudi Arabia. The framework applies to arrangements linked to one or more Qualified Financial Contracts where at least one party is subject to SAMA supervision, and is intended to provide legal certainty for netting and collateral arrangements irrespective of bankruptcy proceedings. SAMA also notes the regulations are consistent with the Kingdom’s legal framework and aligned with relevant international standards and best practices. The regulations take effect immediately and apply to all financial institutions regulated and supervised by SAMA, with the full text published on SAMA’s Rulebook Platform.