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The process of settling transactions. Most exchanges have one or more clearing houses, which are charged with matching orders together, ensuring that deliveries are made to the correct parties, and collecting margin money. Because so many trades take place on an exchange in a given day, clearing houses exist to process what each party owes or is owed in a central location so the fewest securities actually change hands. For example, suppose that a broker-dealer buys 1000 shares of a security and then, in a completely separate transaction, sells 700 of the same shares. At the end of the trading day, the clearing house would determine that the broker-dealer must only buy 300 shares as the other 700 belong to another party. Clearing houses receive a clearing fee in exchange for clearance services.


Clearance is the first half of the process that completes your order to buy or sell a security. During clearance, the details on both sides of the transaction are compared electronically to ensure that the order to buy and the order to sell correspond.

For example, in a stock transaction, the Committee on Uniform Securities Identification Procedures (CUSIP) number, the number of shares, and the price per share must match.

Next, transactions within each broker-dealer are netted down, or offset, by matching its clients' buy orders against sell orders from others of its clients or among a group of affiliated firms. Their records are then updated to reflect the new ownership and account balances.

Any unmatched orders are forwarded to the National Securities Clearing Corporation (NSCC), which instructs selling broker-dealers to provide the relevant securities and the buying broker-dealer to send the cash.

References in periodicals archive ?
With a backlog of at least 700,000 people seeking clearance, temporary credentials have become a necessity.
Because the NBI Clearance website will forward instructions to the one you provided.
Regardless, recognition of the viscous dissipation effects in the flight clearance or mixing sections should be a part of all screw designs.
Banking managers pointed out that domestic banks have completed preparations, both for hardware and software, for initiation of renminbi deposit business and can kick off the business immediately after the signing of cross-Strait currency clearance agreement.
Table 28 Number of Offenses Cleared by Arrest or Exceptional Means Percent of Clearances Involving Persons Under 18 Years of Age by Population Group, 2012 Population group Violent Murder and crime nonnegligent manslaughter TOTAL ALL AGENCIES: Total clearances 442,506 7,384 Percent under 18 8.
To try to achieve the best balance, MED monitors medevacs and medical curtailments from posts and adjusts its medical clearance thresholds as needed.
The consignee is not involved in the clearance process which is saving us time as the entire clearance process can take place during the night upon shipment arrival," explained Marios Tsakalidis, Regional Program Manager for DHL.
An accurate measurement of amyloid-beta production and clearance "would be fantastic as a tool for knowing whether the drugs are really working," says neuroscientist David Teplow of the University of California, Los Angeles School of Medicine.
The MOTs share the broader perspective of route clearance operations with route clearance commanders and their teams, as well as the latest information on new equipment that is available and how it will be used.
That space is so crucial, in fact, that the county mails brush clearance reminders to an estimated 30,000 homes at the beginning of April every year.
Second, unless law enforcement executives have daily, unescorted access to FBI space or a continuing need for sources and methods information, they should acquire a secret clearance as soon as possible, not waiting unnecessarily for a TS clearance.
In July 1996, international standards for humanitarian mine clearance operations were proposed by working groups at a conference in Denmark.