Difference between revisions of "Novation"
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Novation, the trading business, is the process in which a bilaterally-negotiated over-the-counter transaction is moved onto a clearing service, which acts as a buyer to every seller and as seller to every buyer. Reports are then automatically and electronically transmitted to the participant firms' computer systems. Transfer of ownership is conditioned on the simultaneous transfer of sufficient funds to pay in full for the instrument. | Novation, in the trading business, is the process in which a bilaterally-negotiated over-the-counter transaction is moved onto a clearing service, which acts as a buyer to every seller and as seller to every buyer. Reports are then automatically and electronically transmitted to the participant firms' computer systems. Transfer of ownership is conditioned on the simultaneous transfer of sufficient funds to pay in full for the instrument. | ||
== References == | == References == | ||
Revision as of 11:21, 5 April 2012
Novation, in the trading business, is the process in which a bilaterally-negotiated over-the-counter transaction is moved onto a clearing service, which acts as a buyer to every seller and as seller to every buyer. Reports are then automatically and electronically transmitted to the participant firms' computer systems. Transfer of ownership is conditioned on the simultaneous transfer of sufficient funds to pay in full for the instrument.
References[edit]