Interrelations between netting and set-off
Journal Title: Альманах міжнародного права - Year 2016, Vol 13, Issue
Abstract
This article analyses approaches to comparison of netting and set-off developed by scientific doctrine and legislative regulation. It reveals specific features of netting and set-off and highlights common and distinctive features of both mechanisms. The author outlines the main issues related to identification of netting with a set-off procedure. The interrelations between netting and set-off are considered in three dimensions: within the practice established in the financial markets, in legal doctrine developed by law experts and in terms of regulation of netting procedures in national law of different states. The foreign academics and law experts generally agree that netting and set-off are two separate legal instruments that significantly differ from each other. However, based on the market practice the risk of identification of netting with set-off is extremely high. This situation can be explained by the fact that the concept of netting is relatively new mechanism which has not been fully tested by regulatory bodies and courts yet. The foreign states apply various approaches to qualify and determine the legal nature of netting and its interrelation with set-off in their legislation. The author believes that application of specific restrictions applicable to set-off by statutory requirements to the netting mechanism may have an adverse effect on interpretation of netting in general and can deprive parties of financial transactions from the benefits of netting procedure.
Authors and Affiliations
В. Р. ЛЮТИЙ
Keywords
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