Multilateral netting is ________.
A) the netting of the credit or debit position of each participant vis-à-vis all other participants
B) an electronic net settlement network designed to provide settlement to paper-based payment items
C) the netting of the forward position of LVTS participants
D) None of the above.

Question

Quizplus · Accepted Answer

Multilateral netting refers to the process of netting out the credit or debit positions of each participant against all the other participants involved in a transaction. It is a method of settling multiple transactions simultaneously, resulting in fewer transactions and reduced settlement risk. Option B refers to electronic net settlement networks, and option C refers to the netting of forward positions in LVTS, which are not necessarily multilateral. Option D is incorrect as one option has already been chosen as the best choice.

Multilateral Netting Is ________