Which concept allows market participants to consolidate their clearing and settlement functions at a single Clearing Corporation, irrespective of the stock exchange on which the trade is executed?

Practice question from NISM Series VII Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

A

The concept of Novation
B

The concept of Netting
The concept of Interoperability

Correct answer
D

The concept of Interconnectivity

Why this is the answer

Interoperability among Clearing Corporations enables a clearing member to clear and settle trades executed across multiple exchanges through a single Clearing Corporation, thereby improving efficiency and reducing costs.

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NISM Series VII Mock Test 4