Search: Close-out netting

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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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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
https://www.rba.gov.au/publications/bulletin/2010/mar/8.html

Central Clearing of OTC Derivatives | Central Clearing of OTC Derivatives in Australia June 2011 | Consultations

7 Jun 2011 Consultations
In many jurisdictions, the legal robustness of these netting and close-out arrangements is underpinned by legislation. ... In Australia, the relevant legislation is the. Payments Systems and Netting Act 1998.
https://www.rba.gov.au/publications/consultations/201106-otc-derivatives/central-clearing-otc-derivatives.html

Key Features of Repo CCPs | Central Clearing of Repos in Australia: A Consultation Paper | Consultations

6 Mar 2015 Consultations
CCP could realistically close out or hedge its exposure to a defaulted participant. ... Since multilateral netting may have decreased the overall exposure to the defaulted participant, and the CCP can coordinate the close out of exposures to the
https://www.rba.gov.au/publications/consultations/201503-central-clearing-of-repos-in-australia/key-features-repo-ccp.html

OTC Derivatives Reforms and the Australian Cross-currency Swap Market

24 Jun 2013 Bulletin – June 2013
Ivailo Arsov, Greg Moran, Ben Shanahan and Karl Stacey
Reforms to improve the management of counterparty credit risk in over-the-counter (OTC) derivatives markets are underway globally. A key pillar of the reforms is the migration of these markets to central counterparties (CCPs), while higher capital
https://www.rba.gov.au/publications/bulletin/2013/jun/7.html

CCPs and Banks: Different Risks, Different Regulations

17 Dec 2015 Bulletin – December 2015
David Hughes and Mark Manning
Recent debate on the adequacy of regulatory standards for central counterparties (CCPs) has often drawn on the experience of bank regulation. This article draws out the essential differences between CCPs and banks, considering the implications of
https://www.rba.gov.au/publications/bulletin/2015/dec/8.html

Recovery and Resolution of Central Counterparties

19 Dec 2013 Bulletin – December 2013
Matt Gibson
The increasing importance of central counterparties (CCPs) to financial stability has prompted regulators to take steps to ensure that critical CCP services can continue in circumstances of financial distress. These steps include ensuring that CCPs
https://www.rba.gov.au/publications/bulletin/2013/dec/5.html

Costs and Benefits of a Repo CCP – Issues for Consultation | Central Clearing of Repos in Australia: A Consultation Paper | Consultations

6 Mar 2015 Consultations
A CCP also offers the benefit of coordinated close out in the event of a participant default. ... If not, why not? Q23. Do you see benefit in settlement netting by line of security?
https://www.rba.gov.au/publications/consultations/201503-central-clearing-of-repos-in-australia/costs-benefits-repo-ccp.html

The Australian Repo Market | Central Clearing of Repos in Australia: A Consultation Paper | Consultations

6 Mar 2015 Consultations
The GMRA provides for close-out netting in the event one of the counterparties defaults. ... Close-out netting allows an institution to terminate and settle the net value of all contracts with a particular counterparty immediately upon the occurrence of
https://www.rba.gov.au/publications/consultations/201503-central-clearing-of-repos-in-australia/australian-repo-market.html

The Introduction of Same-day Settlement of Direct Entry Obligations in Australia

19 Jun 2014 Bulletin – June 2014
Sascha Fraser and Adriarne Gatty
In November 2013, the Reserve Bank introduced changes to its Reserve Bank Information and Transfer System (RITS) to allow the same-day settlement of non-government direct entry obligations. This outcome met one of the objectives set by the Payments
https://www.rba.gov.au/publications/bulletin/2014/jun/7.html

Reassessing the Costs and Benefits of Centrally Clearing the Australian Bond Market

16 Mar 2023 Bulletin – March 2023
Jon Cheshire and Joanne Embry
This article considers the costs and benefits of centrally clearing the Australian bond market, in light of developments in the market since the Reserve Bank’s last review in 2015.
https://www.rba.gov.au/publications/bulletin/2023/mar/reassessing-the-costs-and-benefits-of-centrally-clearing-the-australian-bond-market.html