Abu Dhabi – Mubasher: UAE President Sheikh Khalifa bin Zayed Al Nahyan on Sunday issued Federal Decretal Law No. (10) of 2018 for “Netting” but said that the law did not apply to financial free zones.
The new law’s provisions “shall apply to all qualified financial contracts, netting agreements specified under this law or collateral arrangement, which are entered into by any person in the state,” Al Nahyan said in a statement.
The law aims to bolster the UAE’s legislative framework for settling obligations arising from qualified financial contracts through set-off, offset, or net out obligations, the UAE government added.
Financial free zones and financial institutions are exempted from the law, provided that they are “licensed to the extent where there are similar legislations governing similar cases referred to in this decretal law.”
“Netting shall include cases of termination, liquidation and/or acceleration of any payment, obligation to deliver entitlement or obligation to make, receive or require payments or deliveries, under a Qualified Financial Contract entered into under a Netting Agreement or to which a Netting Agreement applies,” the statement explained.
Commenting on the new law, deputy ruler of Dubai and UAE finance minister Sheikh Hamdan bin Rashid Al Maktoum said that the law aims to integrate all necessary aspects and provisions so as to ensure the rights of all concerned parties and to protect investors and raise their confidence to increase financial stability, and enhance the UAE’s global competitiveness.
“The law will further strengthen the state's leading position as one of the most important business and financial centers in the world,” Dubai’s deputy ruler added.
The law will also reduce credit and settlement risks and raise regulatory procedure effectiveness, including safeguards related to netting, the minister stated, indicating that the issuance of the law would “strengthen oversight and governance frameworks, improve the performance of the national economy, and attract more foreign investment for the state. "
Late Saturday, UAE President Sheikh Khalifa bin Zayed Al Nahyan issued law no. 9 of 2018 on public debt.
Earlier on Sunday, analysts told Mubasher that the public debt law would boost investor confidence in the UAE and the region.
