Riyadh: The International Swaps and Derivatives Association (ISDA) has endorsed the Close-out Netting and related Collateral Arrangements Regulation adopted by the Capital Market Authority (CMA), which has been in force since July 2025, confirming its alignment with international practices.

According to Saudi Press Agency, the CMA-adopted regulation has been included within the scope of ISDA's legal opinions consistent with international derivatives agreements. This inclusion means that the Kingdom of Saudi Arabia is now recognized as a jurisdiction that supports international netting legislation, strengthening the enforceability of such contracts at the global level.

CMA Deputy of Market Institutions Raed Ibrahim Alhumaid explained that the regulation-approved about four months ago-organizes close-out netting agreements and related financial collateral arrangements in which one party is a Capital Market Institution. He said the regulation aims to enhance financial system stability, protect investors, and contribute to the growth of investments in the capital market, including the derivatives market.

Alhumaid noted that the regulation was adopted to ensure the enforceability of eligible financial contracts and their protection from subsequent changes to the circumstances under which they were concluded, including the initiation of bankruptcy proceedings. It also ensures the enforcement of contractual terms in cases of default, safeguarding the rights of all parties.

He affirmed that the CMA continually reviews and develops capital market rules and regulations to enhance market attractiveness. He added that ISDA's endorsement of the regulation's alignment with international practices represents a positive step toward strengthening confidence in the Saudi market and reflects the regulation's consistency with global standards.

The CMA adopted the Close-out Netting and related Collateral Arrangements Regulation on July 3, 2025. The regulation sets out events of default, identifies the circumstances to which it applies-provided that one party is a Capital Market Institution-defines the scope of application and covered entities, and specifies the eligible financial contracts and transactions benefiting from bankruptcy-law protections, thereby supporting the stability and sustainability of the Kingdom's financial sector and capital market ecosystem.