Derivatives Clearing Organization

From MarketsWiki

A Derivatives Clearing Organization (DCO) is a system or organization that enables parties to a transaction to substitute the credit of the clearing organization for the credit of the parties. It provides for multilateral settlement or netting of obligations or otherwise provides clearing services to mutualize or transfer credit risk from such transactions among participants in the clearing organization. The term Derivatives Clearing Organization was defined under the Commodity Futures Modernization Act of 2000. (CFMA)