central counterparty (CCP)
A central counterparty (CCP) is a clearing institution that becomes the common contractual partner for trades accepted into its system. It replaces direct exposure between the original trading parties with separate obligations between each party and the CCP, while using collateral, netting, and default-management procedures to control the resulting risks.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.
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