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Counterparty

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