Glossary

Clearing — everything that happens between a matched trade and final settlement.

Novation — discharging a bilateral trade and replacing it with two obligations facing the clearing layer.

Counterparty — after novation, always Indent Layer.

Collateral — assets posted to secure obligations, sized against position limits.

Netting — collapsing offsetting obligations so that only the difference settles.

Settlement window — the interval inside which obligations accumulate and net.

Default fund — mutualised capital that absorbs losses after a defaulter's own margin.

Default waterfall — the fixed order in which capital is consumed after a default.

Position limit — the maximum exposure a member may hold, derived from its collateral.

Solvency proof — evidence that posted collateral covers outstanding obligations, without revealing individual positions.

Finality — the point after which a settled obligation cannot be reversed.