ACI Operations Certificate Practice Questions - ACI Operations Certificate (ACI Financial Markets Association) Exam

In the clearing process, how does a Central Counterparty (CCP) mitigate counterparty credit risk for participants?

By acting as a broker to match trades without taking legal responsibility By offering unsecured overdraft facilities to clearing members By interposing itself as the buyer to every seller and the seller to every buyer By forcing all trades to settle on a Delivery-versus-Payment (DvP) basis only

Correct Answer:

By interposing itself as the buyer to every seller and the seller to every buyer

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