What is counter party selection?
In Comdaq Exchange, trading is conducted on an anonymous basis up to the point where the deal is confirmed. Parties find out whom the trade has been conducted with only when the trade has finalized and the contract has been generated from the system. This raises the issue of counter-party risk which is dealt with Counter Party Selection. It is the pre-approval of acceptable trading partners. Companies may pre-approve other members of the exchange for trade on one or all of the following bases: in store; afloat; shipment. If two counter parties have mutual approval, then their orders are ‘live’ in the system, and may be booked and / or negotiated at will. Should approval not be granted in both directions, the counter-parties will be able to view order details, but will not have the ability to trade them.
