Central Counterparty

A Central Clearing Counterparty, also known as Central Counterparty, is a financial organization often operated by major banks, to help facilitate trading in various European derivatives and equities markets. With the objective of easing trading and guaranteeing efficiency and stability in financial markets, CCPs also oversee the correct and timely transfer of securities and capital between parties. CCPs perform two primary functions as the intermediary in a transaction: clearing and settlement. The CCP’s responsibilities also include general market monitoring, acting as a counterparty to both sellers and buyers, collecting money from each, which allows it to guarantee the terms of a trade.