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Counterparty

A counterparty is the other person in a contract. Therefore, if bank A buys a security issued by company B from broker C, bank A has counterparty risk to broker C and Issuer Risk in respect of company B. A counterparty may include any legal person or arrangement, but generally would mean the following:

(a) Any individual;
(b) Any unincorporated body of persons;
(c) Any company which is not a member of a group;
(d) Any group of companies; or
(e) Any government of a State or any public bodies, local authorities or nationalised industries of a State.
Amended: January 2011
 Versions
(2 Versions)
 
Up to Dec 31 2010Jan 1 2011 onwards
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