Novation Defined: Clearing Corporations Become Legal Counterparties in Trades Under Regulation 2(1)(l) of 2018 Securities Rules.
Novation, according to regulation 2(1)(l) of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, is defined as the process where one or more recognized clearing corporations intervene between the parties involved in every trade, becoming the legal counterparty.