Document ID: chunk:federal_register_of_legislation:F2024C00507:body:0:p25
Version: federal_register_of_legislation:F2024C00507
Segment Type: other
Provision Reference: 
Character Range: 68345–71506

The entity whose assets are used to settle the ultimate payment obligations arising from securities transfers within a securities settlement facility, or other clearing and settlement activities. Accounts with the money settlement agent are held by settlement banks, which may act on their own behalf and/or offer payment services to participants that do not have accounts with the money settlement agent.
multilateral net batch                 The settlement of groups of payments, transfer instructions or other obligations together at a discrete, often pre-specified time, where these obligations have been offset among multiple participants.
novation                               A process through which the original obligation between a buyer and a seller is discharged through the substitution of a central counterparty as seller to the buyer and buyer to the seller, creating two new contracts.
omnibus                                An account structure where securities or collateral belonging to some or all customers of a particular participant are commingled and held in a single account segregated from those of the participant.
open offer                             A process through which a central counterparty extends an 'open offer' to act as counterparty to market participants and thereby is interposed between participants at the time a trade is executed.
operational risk                       The risk that deficiencies in information systems or internal processes, human errors, management failures or disruptions from external events will result in the reduction, deterioration or breakdown of services provided by a central counterparty.
payment system                         A set of instruments, procedures and rules for the transfer of funds between or among participants; the system includes the participants and the entity operating the arrangement.
payment versus payment (PvP)           A settlement mechanism that ensures that the final transfer of a payment in one currency occurs if and only if the final transfer of a payment in another currency or currencies takes place.
physical delivery                      The delivery of an asset, such as an instrument or commodity, in physical form.
pooled resources                       Financial resources of a central counterparty that are available in the event of a participant default, and are not restricted in their use to a particular participant. Pooled resources may be provided on a mutualised basis by participants, may be provided on a commercial basis by an external provider (such as a commercial lender, investor, insurer or liquidity provider), or may be backed by the central counterparty's own capital or that of a related body.
portability                            The operational aspects of the transfer of contractual positions, funds or securities from one party to another party.
potential future exposure              Any potential credit exposure that a central counterparty could face at a future point in time. Potential future exposure is technically defined as the maximum exposure estimated to occur at a future point in time at a high level of