General Netting Agreement

15. In the context of the application thus defined, the principles take a broad and functional approach with regard to the various aspects of the effect of a narrow network provision, as resulted from the broad scope of the concept of ”exploitation” within the meaning of Principle 1, paragraph 2. All aspects, from establishment and validity to efficiency to third parties, admissibility of evidence and enforceable force, including insolvency, are covered by the principles. If the principles are intended to ensure the applicability of the compensation provisions, this relates to all of these aspects which can be summarized, such as the operation of the provision for the closing of the compensation. The term ”exploitation” of a narrow network provision is therefore used in all principles as a functional reference to the various aspects described above and replaces the need to refer to more specific terms that are not necessarily sufficiently defined in the international context. 2. These principles make a provision of the completion network or an obligation eligible that would otherwise be totally or partially unenforceable due to fraud or that would be rendered unenforceable by other general enforcement requirements affecting the validity or applicability of contracts. 24. The definition also includes contractual provisions that are not included in the clauses of a single agreement, but in several interconnected agreements, notably in master agreements (to the extent that the underlying obligations covered by the various main agreements are obligations eligible under Principle 4, cf below, paragraph 81).

84. Second, enforcement states may decide to extend protection to the clearing provisions, in accordance with the principles, which cover obligations arising from contracts entered into by parties other than the authorized parties under Principle 3, paragraph 1. Such an extension could be particularly useful for individuals who, to some extent, participate in financial markets and who might otherwise not know whether they are acting for personal, family or budgetary purposes. Each enforcement state is free with respect to the extent of protection and the definition of the group of individuals involved. Unique relationships: contracts concluded provided that each practical point concerns the others are covered. A first case of this type is the quasi-natural category of transactions, for which the only relationship is directly related. For example, swap or pension transactions are concluded on the condition that reciprocal (legally separate) rights and obligations cannot be separated from the parties in a single transaction and should not be considered separately when one of the parties becomes insolvent (i.e., no cherry picking applies only to a portion of those transactions). In a second category of business, this report is relatively broader and established by the parties.