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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.

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