How Stock exchanges ensure the traders counter party risk?

[dhanalakshmi]

COUNTER PARTY RISK IS ENSURED BY STOCK BROKERS WHO ACTS AS MIDDLEMAN OF TRADER AND STOCK EXCHANGE.

[J Santhosh Kumar]

All the traders are connected to exchange only through certified brokers. And it is brokers responsibility to check that the orders are placed with proper balance in traders’s account. Exchange will take from brokers deposit if any misplaced orders from their client, to solve the settlement with counter party

[Abinaya Ravishankar]

Brokers act as a middlemen between Exchange and traders. All certified brokers have to pay caution deposit to the exchange. In case of any disputes the exchange have to take necessary actions to resolve the dispute. If cash its a cash dispute, the exchange take amount from caution deposit and solve the counter party dispute.

[Divya E R]

Traders are connected to exchange only through certified brokers and it is the brokers responsibility to check that the orders are placed with proper depts in the traders’ accounts. The exchange will take from brokers deposit if any misplaced orders from their client in order to solve the settlement with the counterparty.

[Author]

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