Collateral Definition: An asset that is delivered by the collateral provider to secure an obligation to the collateral taker. Collateral arrangements may take different legal forms. Collateral may be obtained using the method of title transfer or pledge of assets. An asset or third-party commitment that is used by a collateral provider to secure an… Read More »
Clearing Definition: The process of transmitting, reconciling and, in some cases, confirming transactions prior to settlement, potentially including the netting of transactions and the establishment of final positions for settlement. Sometimes this term is also used (imprecisely) to cover settlement. For the clearing of futures and options, this term also refers to the daily balancing… Read More »
Available Balance Definition: The total funds a participant in a payment system has available for settlement of transactions at any moment. Calculated as a total of some pre-defined components: opening balance net value of credits and debits processed but not applied yes usable minimum reserve requirement account limits collaterals (loans, pledged securities, pledged stock options… Read More »