20.The Standards requires that a bank should apply netting only when it can satisfy the Central Bank that netting is appropriate, according to the specific requirements established in the Standards. Banks should recognize that this requirement would likely be difficult to meet in the case of trades conducted in jurisdictions lacking clear legal recognition of netting, which at present is the case in the UAE.

21.If netting is not recognized, then netting sets still should be used for the calculation. However, since each netting set must contain only trades that can be netted, each netting set is likely to consist of a single transaction. The calculations of EAD can still be performed, although they simplify considerably.

22.Note that there may be more than one netting set for a given counterparty. In that case, the CCR calculations should be performed for each netting set individually. The individual netting set calculations can be aggregated to the counterparty level for reporting or other purposes.