Public Debt Market Glossary

Public Debt Market Glossary

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Cash transaction 
In the case of the Spanish government debt market, it is an outright transaction whereby an asset is transferred during the five working days after the trading date. When the transfer date is not specified, it is understood as being the first working day following the trading date.
Central counterparty 
An entity whose main function is to interpose itself in security clearing and settlement processes, basing its activity on contract novation. Therefore, it becomes the seller to the buyer and the buyer to the seller, assuming the counterparty and trading risk. To manage said risk, the central counterparty must make an appropriate selection of the participant institutions, ensuring the positions are suitably hedged by demanding collateral, and designing loss distribution mechanisms that avoid possible problems of moral risk.