Document background
The Master Netting Agreement serves as a critical risk management tool in financial markets, particularly within the Swiss jurisdiction. It is designed for situations where parties engage in multiple financial transactions and seek to mitigate counterparty risk by establishing legally enforceable netting arrangements. The agreement becomes especially important in scenarios of counterparty default or insolvency, where it enables the non-defaulting party to calculate a single net settlement amount across all covered transactions. This document type must comply with Swiss financial regulations, including requirements under the Swiss Federal Banking Act, FINMA regulations, and Swiss bankruptcy laws. The Master Netting Agreement typically covers various financial instruments including derivatives, securities lending, and repurchase agreements, providing a robust framework for risk reduction and regulatory compliance.
