Master Netting Agreement Template for United States

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Key Requirements PROMPT example:

Master Netting Agreement

"Need a Master Netting Agreement for our hedge fund to establish netting arrangements with multiple bank counterparties in the US, with specific provisions for cryptocurrency trading and enhanced credit support requirements to be effective from March 2025."

Document background
Master Netting Agreements are essential risk management tools used to reduce credit exposure between counterparties engaging in multiple financial transactions. These agreements, governed by U.S. law, enable parties to combine and offset their obligations into a single net amount, particularly crucial in default scenarios. The Master Netting Agreement includes specific provisions for close-out netting, set-off rights, and calculation methodologies, while ensuring compliance with federal regulations such as FDICIA and the Bankruptcy Code. It's particularly valuable for institutions managing multiple trading relationships and seeking to minimize counterparty risk.
Suggested Sections

1. Parties: Identification and details of contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including relevant legislation references (FDICIA, Bankruptcy Code, Dodd-Frank Act, UCC)

4. Netting Arrangements: Core provisions describing netting methodology and processes

5. Events of Default: Circumstances triggering netting rights

6. Set-off Rights: Rights to set off obligations between parties

7. Representations and Warranties: Standard and specific representations regarding capacity and authority to enter into netting arrangements

8. Governing Law and Jurisdiction: Specification of US law as governing law and jurisdiction provisions

Optional Sections

1. Cross-Border Provisions: Additional provisions for international transactions when parties are in different jurisdictions

2. Credit Support Arrangements: Provisions for collateral and security arrangements when additional security is required

3. Special Entity Provisions: Additional provisions for regulated entities when one party is a regulated financial institution

4. Tax Provisions: Specific tax-related provisions when cross-border elements or specific tax considerations apply

Suggested Schedules

1. Schedule of Covered Transactions: Comprehensive list of transactions subject to netting under the agreement

2. Calculation Methodology Schedule: Detailed explanation of netting calculations and valuation methods

3. Form of Notices Schedule: Standard forms for various notices required under the agreement

4. Eligible Collateral Schedule: List of acceptable forms of collateral and their valuation methods

5. Contact Details Schedule: List of authorized representatives and contact information for notices

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

FDICIA: Federal Deposit Insurance Corporation Improvement Act - Key federal legislation that provides statutory framework for netting of financial contracts

Bankruptcy Code Section 561: U.S. Bankruptcy Code provisions specifically addressing the protection of netting agreements and financial contracts in bankruptcy proceedings

Financial Netting Improvements Act 2006: Federal law that strengthens the enforceability of netting agreements and reduces systemic risk in financial markets

Dodd-Frank Act: Comprehensive financial reform legislation that impacts netting agreements, particularly in relation to derivatives and systemic risk

Federal Reserve Act: Fundamental banking legislation that provides framework for Federal Reserve's oversight of financial institutions and their agreements

UCC Article 9: Uniform Commercial Code Article governing secured transactions, relevant for collateral arrangements in netting agreements

ISDA Framework: International Swaps and Derivatives Association Master Agreement framework, providing standardized terms for netting arrangements

CFTC Regulations: Commodity Futures Trading Commission regulations governing derivatives and related netting agreements

SEC Regulations: Securities and Exchange Commission regulations impacting securities-related aspects of netting agreements

Basel Committee Guidelines: International banking guidelines providing risk management standards for netting arrangements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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