How Does Non-Custodial Trading on an RFQ Platform Affect Settlement Risk?
Non-custodial trading on an RFQ platform does not eliminate settlement risk, but it shifts where the risk resides. The platform itself is not a counterparty, so there is no platform-specific custody risk.
Settlement risk remains between the two trading counterparties until the trade is fully settled. This requires reliance on robust legal agreements and established post-trade settlement processes, often involving third-party custodians or atomic settlement mechanisms.