National Assembly Committee Approves Netting of Financial Arrangements Bill 2025
A National Assembly standing committee has approved the Netting of Financial Arrangements Bill 2025, advancing legislation that would provide a formal legal framework for netting agreements in Pakistan's financial sector. The approval moves the bill closer to full parliamentary enactment.
Netting arrangements are a standard risk management instrument in modern financial markets, allowing counterparties in derivatives, securities, and interbank transactions to offset mutual obligations and reduce systemic exposure. Their absence from a codified legal framework has long been cited as a structural gap in Pakistan's financial architecture.
The bill's passage through committee represents a technically significant milestone for Pakistan's capital markets and banking sector. Financial institutions have lobbied for formal netting legislation for years, arguing that it would reduce credit and liquidity risk, lower collateral requirements, and enhance Pakistan's attractiveness to international financial counterparties.
The State Bank of Pakistan and the Securities and Exchange Commission of Pakistan have both advocated for the bill, which is also seen as important for compliance with international financial standards. Its eventual enactment would align Pakistan more closely with global market infrastructure norms.
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