netting by novation

What is netting by novation?

netting by novation definition and meaning on Finance terms:
An agreement whereby obligations derived from individual transfer orders are netted and replaced by a new obligation. The parties to the new obligation may be the same as the parties to the existing obligation. Alternatively, in the context of some clearing house arrangements, there may be some substitution of parties. Antonym:
position netting<

 

reference: https://www.ecb.europa.eu/home/glossary/html/index.en.html

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