Legal entity that acts as an intermediary between the parties to a securities trade and is the seller to every buyer and the buyer to every seller. The counterparty risk of the trading parties is transferred to the CCP, which normally guarantees that both counterparties to a transaction remain anonymous.

CCPs are specialized financial institutions that facilitate trading in cash securities and derivatives by simplifying clearing and settlement. A CCP stands between the seller and buyer in each trade shortly after the trade is made and replaces the original contractual obligations to deliver and to pay with equivalent obligations with the CCP. For more on DTCC's viewpoint about the rapidly changing global landscape of CCPs, please see our White Paper, addressed to securities industry operationsand risk management professionals and others interested and involved with CCPs around the world.