Avräkning

Avräkning, or settlement, is the process of determining and settling financial obligations and deliveries between counterparties after a trade. It typically involves netting positions, calculating net payment obligations, and transferring money or assets to complete the transaction.

In most markets avräkning is handled by a clearing organization or a bank acting as a central counterparty. These institutions register trades, perform credit risk checks, compute net exposures, and issue settlement notices or invoices to participants. The aim is to reduce credit risk and improve liquidity by centralizing settlement and standardizing procedures.

The term is used across sectors, including securities trading, derivatives markets, and energy markets. In energy markets, avräkning settles the differences between producers, traders, grid operators, and suppliers based on measured deliveries and market rules. The process ensures that each party receives or pays the correct amount corresponding to their market position.

Typical steps include trade capture and registry, position netting, calculation of net settlement amounts, payment and delivery of assets, and reconciliation between counterparties. Settlement frequencies vary: intraday, end-of-day, or monthly, depending on market rules and infrastructure.

Important considerations include data accuracy, timing of settlements, currency and collateral arrangements, and overall risk management. Delays or errors can increase credit or liquidity risk and undermine market efficiency.

See also: clearing house, settlement, netting, Nord Pool, Nasdaq Clearing.