Document background
The Master Netting Agreement serves as a critical risk management tool in financial transactions under German law. It is used when parties engage in multiple financial transactions and seek to reduce their credit exposure and operational complexity by establishing a single net settlement mechanism. The agreement provides legal certainty for netting arrangements, particularly important in the context of German insolvency proceedings. It covers various financial instruments including derivatives, securities lending, and repurchase agreements, establishing clear procedures for both payment netting during normal operations and close-out netting in default scenarios. The document is designed to comply with German regulatory requirements while maintaining consistency with international netting practices.
