Page 48 - PRIAA Glossary

DEFAULT
The failure of a party to honour its obligations under a financial contract.
DEFAULT FUND (GUARANTEE FUND)
A fund formed by compulsory contributions from clearing members, held by the clearing house and used to deal with the consequences of a clearing member default. This fund is a risk mutualisation mechanism that is only used after the defaulter’s variation and initial margin and default fund contributions have been exhausted. See also “default waterfall”.
DEFINITIONS
The market standard provisions by reference to which
the terms of a derivative transaction are described. The definitions are published and maintained by the International Swaps and Derivatives Association (ISDA).
DELAYED SETTLEMENT COMPENSATION
A component of pricing in the settlement of debt trades
that do not close on a timely basis (T+7 for par and T+20 for distressed), that is intended to put parties in the approximate economic position on the settlement date that they would have been in if they had closed on a timely basis.
DELEGATED REPORTING
Refers to the delegation of a regulatory reporting obligation to the counterparty of a trade or a third party. In that case, the counterparty or a third party would report a transaction on behalf of the party that had delegated its reporting obligation to them.
DELISTING
The removal of a security from an exchange. The trading
of the security on the exchange is discontinued after the delisting. However, the security can still change hands off the exchange. A security is usually delisted if it fails to meet certain norms required for it to be listed on the exchange or if the company sees value in the stock and delists it to prevent profits from being distributed to other stakeholders.
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