Master Netting Agreement Template for Singapore

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Key Requirements PROMPT example:

Master Netting Agreement

"Need a Master Netting Agreement between our Singapore bank and a Hong Kong-based hedge fund, covering FX derivatives and securities lending transactions, with specific provisions for multi-branch operations."

What is a Master Netting Agreement?

The Master Netting Agreement is essential for parties engaging in multiple financial transactions in Singapore's financial markets. It reduces credit risk and capital requirements by allowing the netting of positive and negative exposures between counterparties. This document, governed by Singapore law, is particularly crucial given Singapore's position as a major financial hub and its robust legal framework for netting arrangements. The agreement typically covers various financial instruments including derivatives, securities lending, and repurchase agreements, providing legal certainty for close-out netting in default scenarios.

What sections should be included in a Master Netting Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Scope of Agreement: Covered transactions and arrangements

5. Netting Provisions: Core netting mechanisms and calculations

6. Events of Default: Triggers for early termination and netting

7. Close-out Procedures: Process for termination and settlement

What sections are optional to include in a Master Netting Agreement?

1. Credit Support Arrangements: Provisions for collateral arrangements when parties agree to provide security

2. Cross-Border Provisions: Special provisions applicable when parties are in different jurisdictions

3. Multiple Branch Provisions: Specific provisions for dealing with entities having multiple branches or offices

What schedules should be included in a Master Netting Agreement?

1. Schedule 1 - Covered Transactions: List of transaction types covered by the agreement

2. Schedule 2 - Calculation Methods: Detailed methodology for netting calculations

3. Schedule 3 - Form of Notices: Standard forms for various notices under the agreement

4. Appendix A - Contact Details: Contact information for notices and communications

5. Appendix B - Eligible Collateral: List of acceptable forms of collateral and their valuation methods

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Securities and Futures Act (Cap. 289): Primary legislation governing securities, derivatives and netting arrangements in financial markets. Part VII specifically deals with provisions for netting arrangements.

Companies Act (Cap. 50): Key legislation governing corporate entities in Singapore, with Part VIA specifically addressing judicial management and its impact on netting arrangements.

Banking Act (Cap. 19): Regulates banking institutions and their activities, including their ability to enter into netting arrangements and related risk management requirements.

Bankruptcy Act (Cap. 20): Governs personal bankruptcy proceedings and their impact on netting arrangements with individuals.

Insolvency, Restructuring and Dissolution Act 2018: Modern consolidated legislation dealing with corporate insolvency, restructuring and dissolution, crucial for understanding the enforcement of netting arrangements in distress scenarios.

Payment and Settlement Systems (Finality and Netting) Act 2002: Specific legislation ensuring the finality of payments and settlements in designated systems, including the protection of netting arrangements.

MAS Guidelines on Risk Management Practices: Regulatory guidelines issued by the Monetary Authority of Singapore setting out expectations for risk management in financial institutions, including netting arrangements.

MAS Guidelines on Close-out Netting: Specific regulatory guidance on the implementation and operation of close-out netting arrangements in Singapore.

MAS Financial Market Infrastructure Standards: Standards set by MAS for financial market infrastructure, including requirements relevant to netting arrangements and settlement systems.

ISDA Master Agreement Framework: While not legislation, these internationally recognized standards provide important guidance for drafting master netting agreements that are compatible with Singapore law.

Basel III Requirements: International banking standards that impact how netting arrangements are treated for capital adequacy and risk management purposes under Singapore's implementation.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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