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Clearing House |
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Clearing House An agency or corporation on an exchange that settles transactions for a fee. Most exchanges have one ore more clearing houses that are charged with matching orders together, ensuring that delivery is made to the correct party, 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 that the fewest securities actually change hands. For example, suppose that a broker-dealer buys 1,000 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 these services. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Established in 1994, EDCH is one of the leading clearing houses in the world and it provides a complete solution to GSM operators for roaming facilities to be provided to their customers. The comments come after the launch this week of two European CDS clearing houses and an agreement the commission hammered out with 10 of the largest credit-derivative dealing banks in February for them to start clearing CDS trades on Clearing houses have shot to the fore during the financial crisis because of the role they play in post-trade processing and the fact that they can guarantee that transactions take place even when one party defaults as Lehman Brothers did last year. |
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