Section 2

a provision in a qualified financial agreement which provides that upon the occurrence of the events specified by the parties in the agreement, all obligations owed by one party to another party under a qualified financial transaction are reduced to or replaced with a single net amount in accordance with the qualified financial agreement; or

any other mechanism which has the effect of determining a single net amount prescribed by the Minister to be a netting provision under paragraph 6(1)(b);

“prescribed” means prescribed by order published in the

Gazette;

“qualified financial agreement” means—

a master agreement, with a netting provision, in respect of one or more qualified financial transactions, and where a master agreement is also in respect of one or more transactions that are not qualified financial transactions, the master agreement shall be a qualified financial agreement only with respect to the transactions that are qualified financial transactions;

any agreement or arrangement prescribed by the

Minister to be a qualified financial agreement under paragraph 6(1)(a); or

an agreement relating to financial collateral that secures payment or performance of an obligation, including any agreement under which title to property has been provided for the purpose of such security, with respect to one or more qualified financial transactions under a master agreement referred to in paragraph (a) or an agreement or arrangement referred to in paragraph (b);

“qualified financial transaction” means the transaction referred to in section 5 and includes any other transaction prescribed by the Minister to be a qualified financial transaction under paragraph 6(1)(c);

“securities” includes securities which are in accordance with

Shariah.

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Netting of Financial Agreements 7