Central counterparty: Difference between revisions

From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson
(Layout.)
imported>Doug Williamson
(Update external links.)
 
(4 intermediate revisions by the same user not shown)
Line 1: Line 1:
(CCP).  
(CCP).  


A financial institution that acts as an intermediary between market participants including corporate treasuries.
A central counterparty is an institution, acting in one or more securities or cash markets, that is interposed between two trading parties.  


The CCP must be duly recognised by the regulator ('Competent Authority') in its jurisdiction.
The central counterparty guarantees the performance of the underlying transaction by acting as a matching seller to the buyer and a matching buyer to the seller.




Line 15: Line 15:


Also sometimes known as 'central clearing parties'.
Also sometimes known as 'central clearing parties'.
<span style="color:#4B0082">'''''Brexit, central counterparties, stability risks and costs'''''</span>
:"... If we turn to central counterparties (CCPs), if the UK leaves the EU without mitigating action on both sides, EU and UK CCPs could find they are in breach of regulation by providing clearing services in the other’s jurisdiction.
:This would apply to maintaining existing positions as well as taking on new positions. This would require abrupt close-out of positions, with attendant financial stability risks and costs to real economies.
:I would add that this risk is more acute for EU users because of the volume of activity conducted in UK CCPs."
:''Andrew Bailey, chief executive, Financial Conduct Authority, February 2018.''




==See also==
==See also==
* [[Bank of England]]
* [[Brexit]]
* [[Brexit]]
* [[Clearance]]
* [[Clearing house]]
* [[Clearing house]]
* [[Competent Authority]]
* [[Competent Authority]]
Line 42: Line 32:




==External links==
==External link==
 
[https://www.fca.org.uk/news/speeches/future-city Andrew Bailey, Financial Conduct Authority (FCA), The Future of the City]


[https://www.fca.org.uk/news/statements/statement-transitional-arrangements-trading-venues-under-mifir-article-542 FCA agrees transitional arrangements for ICE Futures Europe and the LME]
[https://www.bankofengland.co.uk/quarterly-bulletin/2013/q2/central-counterparties-what-are-they-why-do-they-matter-and-how-does-the-bank-supervise-them How the Bank of England supervises central counterparties]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Treasury_operations]]
[[Category:Treasury_operations]]

Latest revision as of 17:55, 16 February 2022

(CCP).

A central counterparty is an institution, acting in one or more securities or cash markets, that is interposed between two trading parties.

The central counterparty guarantees the performance of the underlying transaction by acting as a matching seller to the buyer and a matching buyer to the seller.


UK central counterparties recognised by the Bank of England include:

  • CME Clearing Europe Limited
  • LCH.Clearnet Limited
  • LME Clear Limited


Most central counterparties are clearing houses.

Also sometimes known as 'central clearing parties'.


See also


External link

How the Bank of England supervises central counterparties

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Central_counterparty&oldid=9053’