Section 6 of BNQFCA : Section 6: Invocation Of Close-Out Netting
BNQFCA
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Explanation using Example
Imagine a scenario where Company A and Company B have entered into a qualified financial contract that includes a netting agreement. Company B experiences financial difficulties and fails to make a scheduled payment to Company A, triggering an 'event of default' as per their agreement.
Company A decides to initiate close-out netting and sends a notice to Company B. Because the agreement specifies that certain events can trigger automatic close-out netting, Company A does not need to wait for consent from Company B or any insolvency practitioner, even if Company ...
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