What Is the Role of a "Central Counterparty" (CCP) in the Netting Process? ▴ Learn

What Is the Role of a “Central Counterparty” (CCP) in the Netting Process?

A Central Counterparty (CCP) acts as the buyer to every seller and the seller to every buyer in a financial market. By interposing itself between counterparties, the CCP guarantees the settlement of trades, even if one party defaults.

In the netting process, the CCP aggregates all obligations, reducing the total number of settlements required and significantly mitigating systemic counterparty risk for all market participants.

How Does Multilateral Netting Differ from Bilateral Netting?

How Does a Central Counterparty (CCP) Traditionally Handle Netting, and How Does Blockchain Disrupt This?

What Is the Difference between Payment Netting and Close-out Netting?

How Does the Use of a ‘Master Netting Agreement’ Reduce Counterparty Exposure for a Prime Broker?