Counterparty
In simple terms a counterparty is one side of a trade, for example the counterparty to a seller is the buyer. A counter party can be an individual, a business, or an organisation such as even a government, and carries associated counterparty risks, normally financial and associated with the other party not performing or fulfilling their side of a transaction.
In modern financing a counterparty may not actually be known as the counterparty as risk has been mitigated to a clearing firm, central counterparties or a central counterparty clearing house (CCP). These organisations are normally financial institutions that are registered and regulated for the sole purpose of taking on counterparty credit risk between different parties in a transaction. They help facilitate derivatives and equities trading, providing clearing and settlement services for trades in foreign exchange, securities, options, and derivative contracts. As development and construction projects often involve high financial risks both the term counterparty and clearing house are relevant.
Within the European Union there is a Central Counterparties (CCPs) list of institutions who have been authorised to offer services and activities in accordance with Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR).
When the UK left the European Union, The European Union (Withdrawal) Act 2018 (EUWA) repealed the European Communities Act 1972 and converted into UK domestic law the existing body of directly applicable EU law. The purpose of the EUWA being to provide a functioning statute book directly after leaving the EU. Specific guidance on these matters in included in the Government The Investment Exchanges, Clearing Houses and Central Securities Depositories (Amendment) (EU Exit) Regulations 2018. The EUWA gives Ministers powers to make Statutory Instruments (SIs) to prevent, remedy or mitigate any failure of EU law to operate effectively, or any other deficiency in retained EU law, contingency preparations for financial services legislation are referred to as ‘onshoring’.
[edit] Related articles on Designing Buildings
- Breach of contract
- Brexit - the case for infrastructure.
- Collateral warranty.
- Construction contract.
- Contracts for Difference.
- Contract law.
- Contract v tort.
- Contracts under seal v under hand.
- Disputes.
- Letter of intent.
- Overcoming the challenges of Brexit.
- Privity of contract.
- Rights of third parties.
- The SME's updated guide to Brexit.
- What does Brexit mean for construction?
Featured articles and news
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation which closes 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
From project managers to rising stars, sustainability pioneers and more.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.