Saudi Arabia implements netting rules in July 2025 to boost derivatives market stability and investor protection.

Saudi Arabia has enacted a close-out netting regulation effective July 2025, enhancing legal certainty for derivatives transactions by allowing counterparties to offset obligations upon default. The Capital Market Authority’s rule, backed by ISDA’s legal opinions, exempts qualified financial contracts from bankruptcy laws, improving market stability and investor protection. The move supports the growth of Saudi Arabia’s derivatives market, which has expanded since its 2020 launch with index futures and recent additions of single stock futures and options. The regulation aligns with international standards, encouraging global participation and strengthening the Kingdom’s financial system.