(redirected from clearances)
Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia.
Related to clearances: Sutherland Clearances


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
A number of valuable works have focused on the methodology for modeling and simulation of mechanical systems with clearance joints, as well as prediction and quantification of the dynamic response based on the system parameters of clearance size, system inputs, material, and surface properties.
Jowyk understands the both the gravity and complexity of the security clearance process.
A web portal was launched today for online submission of applications for Environment Clearance by State Environment Impact Assessment Authorities for Category B' projects.
Do you scud run and risk hitting one of those expletive-not-deleted towers that are reproducing in magnitudes, competing with each other to snatch airplanes out of the air, or do you get an IFR clearance? Can you even get an instrument clearance without landing and getting on the phone to FSS?
The shear of the polymer in the flight clearance can add significantly to the melt temperature and energy efficiency.
In exchange for the almost P1-billion budget, the NBI promised to process half of the 5,354,000 clearance applications it will receive this year within 10 minutes "and this promise is now part of the law," Recto said.
During transient operations (e.g., start up, load variation, or a sudden trip condition) gas turbine blade tip clearances will change based on blade/disk centrifugal loads and the different response times of engine parts to thermally induced expansions and contractions.
BRUSSELS, Rajab 25, 1434, Jun 4, 2013, SPA -- Military airlift operations in Europe have been simplified by the European Defense Agency, using a diplomatic clearance web portal, UPI quoted officials as saying.
The number of green channel clearances is affected by the conditionality imposed under the Import Policy as the Risk Management System (RMS) only clears containers which comply with the Import Policy.
The pilot reached I JIDUK without an approach clearance. The frequency was congested, making him effectively NORDO.
The Bureau of Internal Revenue (BIR) has warned the public against a scam wherein fake tax clearance certificates were being used to extort money from those expecting shipments from overseas.