Counterparty arrangement and method for use in hedging and financial derivative transactions

A method to facilitate a derivative transaction with a customer using a counterparty arrangement, the method comprising:

• establishing a counterparty entity as a joint venture between the customer and a plurality of common members;
• providing a portion of the capital to the counterparty from each of the plurality of common members and the customer;
• providing another portion of the capital to the counterparty;
• purchasing assets for executing a derivative transaction between the counterparty and the customer using the capital provided to the counterparty;
• hedging payment obligations of the counterparty under the derivative transaction by using the assets purchased for executing the derivative transaction;
• and
• guaranteeing through a financial institution performance of at least one of the counterparty and the customer in the derivative transaction;
• wherein operations of the counterparty are financially independent of the plurality of common members and the customer.