A master netting agreement is an agreement between two parties, known as counterparties, that governs the processing of certain clearing transactions or contracts. Two transactions balance when one of the profits leads to a loss in the other. In other words, transactions secure each other. A master netting agreement requires a practice called “net settlement” when one of the counterparties does not use or terminates a contract under the netting contract. Clearing includes offsetting the value of multiple positions or payments that are to be exchanged between two or more parties. It can be used to determine to which party remuneration is due in a multi-party agreement. Clearing is a general concept that has a number of more specific applications, including in financial markets. Businesses can also use compensation to simplify third-party invoices and ultimately reduce multiple invoices to one. Before the introduction of the Clearing Act, the use of derivative contracts by financial institutions was common. However, the UAE`s legal analysis of these agreements contained a number of qualifications that prevented the UAE from being considered a jurisdiction in which the applicability of set-off was certain. . . .