multilateral netting

multilateral netting

an arrangement whereby two or more associated companies offset their receipts and payments with each other, leaving a single net intra-company receipt or payment balance. Multilateral netting is used particularly by MULTINATIONAL ENTERPRISES which operate many overseas subsidiaries trading in different national currencies, in order to simplify the settlement of intra-group indebtedness. Multilateral netting also serves to reduce a company's EXCHANGE RATE EXPOSURE by minimizing the amount of external purchases and sales of foreign currencies.
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References in periodicals archive ?
In this section, I explain how central clearing arrangements benefit CMs and end-users through multilateral netting, collateralization of positions, transparent pricing, and default management.
Central clearing: risks and customer protections
The companies stated that the new service creates higher operational efficiencies and through multilateral netting, lowers liquidity and payment demands.
CLS and Markit launches new FX settlement service for cross currency swaps
The Coprocess website outlines solutions to allow invoice level multilateral netting or intercompany netting and invoice level matching and so addresses many intercompany woes.
World Leader in Intercompany Netting Software Launches New Website
For Biomet, that has meant moving to a notional cash pool and multilateral netting.
Going global on a budget
Through centralising trades into a single CCP, the horizontal model can offer multilateral netting and cross-margining benefits which may reduce the CCP's own credit exposure.
BIS reports on clearing model risks
Queue release algorithms, SPL, INJ, Bilateral off-setting (BOS) algorithms, partial netting algorithms (PNS), and multilateral netting algorithms (MNS) are used with SET algorithms.
Simulation of automated real-time gross interbank settlement/Automatizuotu tarpbankiniu realaus laiko skubiu atskiruju atsiskaitymu imitavimas
In the case of multilateral netting, the legislation only applies where there is a recognised multilateral netting agreement.
Designation of payment systems--new Part VC of the Reserve Bank of New Zealand Act 1989
But increasingly, it's being tweaked by ideas like automation, offshore facilities, multilateral netting and the trading of money market funds.
Letting everyone into the pool. (Cash Management)
More sophisticated parties allow for multilateral netting where the sum of each participant's bilateral net position is determined to arrive at a net-net position.
Derivatives and credit support
The principal alternatives to RTGS systems for large-value funds transfers are bilateral correspondent-banking relationships and multilateral deferred net settlement (DNS) systems.(10) Both correspondent banking and multilateral netting systems offset gross payments obligations in order to arrive at a much smaller net settlement obligation.(11) Similarly, the principal alternative to trade-by-trade gross settlement of trades in securities and other financial obligations is a net securities or financial obligation settlement system.
Recent developments in wholesale payments systems
The other is a periodic multilateral netting system.
Settlement risk in large-value payment systems

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