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RBA Glossary definition for Close-out netting

Close-out netting – An arrangement to settle all contracted but not yet due liabilities to, and claims on, an institution by a single payment, immediately upon the occurrence of one of a list of defined events such as the appointment of a liquidator to that institution.

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2 May 2023
A glossary of terms used on the RBA website


1 Dec 1994 RDP 9409
Marianne Gizycki and Brian Gray
the legal issue is the extent to which such close-out netting contracts are enforceable at law. ... Where such laws exist, close-out netting would have little meaning since, for the failed company, only favourable contracts would be recognised.
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December: 1997-Sample Questionnaire

9 Mar 2023 Media Release
8. Does your institution engage in formal or informal payments netting arrangements for foreign exchange settlements? ... If so, to whom? do these arrangements include close-out netting provisions in the event of default?

OTC Derivatives Reform: Netting and Networks | Conference – 2013

19 Aug 2013 Conferences
Alexandra Heath, Gerard Kelly and Mark Manning
values or at values reflecting any loss to the surviving party from replacing the trades (so-called close-out netting). ... Such losses arise when the market price of the contract moves adversely between the default event and the surviving counterparty's

December: 1997-Risk Management Practices

9 Mar 2023 Media Release
While some of these agreements provide for payments netting as an option, all have close-out netting provisions in the event of a default by one party. ... The RBA has long supported the introduction of legislation to validate netting arrangements in

Special Topic: Default Arrangements | 2010/11 Assessment

9 Mar 2023
The specific close-out method used will depend on market conditions,and the products in question. ... Use of auctions to close out exposures is less likely to be considered by ASX.

December: 1997-Glossary

9 Mar 2023 Media Release
Netting may take several forms which have varying degrees of legal enforceability in the event of default of one of the parties (see also close-out netting, netting by novation and ... Depending on the legal system, obligation netting can find a legal

Appendix B: Detailed Assessment of the Reserve Bank Information and Transfer System | 2014 Assessment of the Reserve Bank Information and…

9 Mar 2023
Close-out netting provisions included in repo contracts with participants provide for the immediate liquidation of collateral in the event of default. ... In the event of insolvency, the close-out netting provisions included in the repo agreements allow

The Foreign Exchange Market and Central Counterparties

10 Mar 2010 Bulletin – March 2010
Mark Manning, Alex Heath and James Whitelaw
parameters for the management of this replacement-cost risk through bilateral (close-out) netting and margin requirements. ... Bilateral payment and close-out netting under ISDA Master Agreements is common market practice in the foreign exchange market

Standard 1: Legal Basis | Financial Stability Standards for Central Counterparties December 2012

9 Mar 2023
Laws and regulations specific to a central counterparty's activities include those governing: its authorisation, regulation, supervision and oversight; rights and interests in financial instruments; settlement finality; close out; novation; netting;