Clearing Corporation


DEFINITION of 'Clearing Corporation'

An organization associated with an exchange to handle the confirmation, settlement and delivery of transactions, fulfilling the main obligation of ensuring transactions are made in a prompt and efficient manner. They are also referred to as "clearing firms" or "clearing houses".

BREAKING DOWN 'Clearing Corporation'

In order to make certain that transactions run smoothly, clearing corporations become the buyer to every seller and the seller to every buyer. In other words, they take the offsetting position with a client in every transaction.

  1. Delivery Instrument

    A document given to the holder of a futures contact that may ...
  2. Delivery Date

    1. The final date by which the underlying commodity for a futures ...
  3. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  4. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  5. Confirmation

    1. The occurrence of two or more indicators corresponding with ...
  6. Electronic Payments Network - EPN

    An electronic automated clearing house (ACH) that serves as the ...
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  1. What is the haircut rate imposed by clearing corporations?

    A haircut rate is a measure that reduces the value of any collateral used in a loan to ensure that when the effects of volatility ... Read Full Answer >>
  2. When is a share purchase marked as 'settled' by a brokerage?

    The T+3 rule governs the settlement of stock share purchases. Per the rule, set by the Uniform Practice Code, purchases of ... Read Full Answer >>
  3. How are swap agreements financed?

    Since swap agreements involve the exchange of future cash flows and are initially set at zero, there is no real financing ... Read Full Answer >>
  4. What are the Securities and Exchange Commission regulations regarding swaps?

    The U.S. Securities and Exchange Commission (SEC) was granted the authority to regulate security-based swaps (SBS) by Title ... Read Full Answer >>
  5. How does the Private Sector Adjustment Factor (PSAF) affect competition in the private-sector?

    There's no sure way of evaluating the real impact of the private sector adjustment factor (PSAF) on the competitiveness of ... Read Full Answer >>
  6. What does CHIPS UID mean?

    CHIPS UID stands for Clearing House Interbank Payments System Universal Identifier. This is just a fancy name for an electronic ... Read Full Answer >>

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