An Introduction To The Netting Regime In Bahrain

Netting is recognised under Law No. 64 of 2006 promulgating the Central Bank of Bahrain ("CBB") and Financial Institutions Law, as amended ("CBB Law"). Article 1 of the CBB Law defines a "Market Contract" "as a contract concluded in accordance with the regulations of the CBB and Article 108(b) of this law." Resolution No. 44 of 2014 with respect to promulgating a regulation for close-out netting under a Market Contract ("Netting Regulations") in turn defines a "Market Contract" as "For the purposes of this Regulation only, the expression "Market Contract" as used in Article 1 and Article 108 of the Law shall be reference to "Qualified Financial Contract" as used in this Regulation."