NIBOR-FRA options are traded in the current market structure for Norwegian interest rate derivatives. Trades in options will be reached through bilateral negotiations between buyers and sellers, and reported to Nasdaq for central counterparty clearing.
Contract settlement takes place through a bilateral negotiation between buyer and seller. Following settlement, the transaction is reported to Nasdaq Stockholm for clearing. Novation, meaning when the exchange substitutes existing contracts with two new ones, in relation to the buyer and seller takes place when the settlement is matched and collateral has been placed. Subsequently, there is no counterparty relationship between the buyer and seller; instead both parties have the exchange as counterparty.
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