ISDA Updates Model Netting Act

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.