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An adjunct to a futures exchange through which transactions executed on its floor where trades are settled by a process of matching purchases and sales. A clearing organization is also charged with the proper conduct of delivery procedures and the adequate financing of the entire operation.

Clearing Corporation

An agency or corporation on an exchange that settles transactions for a fee. Most exchanges have one or more clearing corporations 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 corporations exist to process what each party owes or is owed in a central location so that the fewest securities and the least amount of money 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 corporations receive a clearing fee in exchange for these services.


Clearing corporations, or clearinghouses, provide operational support for securities and commodities exchanges. They also help ensure the integrity of listed securities and derivatives transactions in the United States and other open markets.

For example, when an order to buy or sell a futures or options contract is executed, the clearinghouse compares the details of the trade. Then it delivers the product to the buyer and ensures that payment is made to settle the transaction.

References in periodicals archive ?
A derivatives clearinghouse can successfully decrease systemic
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Should you wish to access or add information to the site, please contact the clearinghouse team through the website.
The clearinghouse encourages users of this e-pub to duplicate and distribute as many copies as desired.
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The Bureau of Justice Assistance Clearinghouse, which supplies Bureau of Justice Assistance program information designed to provide Federal funding and technical assistance to State and local governments to improve the criminal justice system.
These are the National Self-help Clearinghouse (City University of New York, 212-840-1259) and the Self-Help Clearinghouse of Greater Washington (Mental Health Association of Northern Virginia, Falls Church, VA, 703-536-4100).
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Also since 1987, depositories designed to limit settlement risks have begun to immobilize certain mortgage-backed securities and commercial paper, and a clearinghouse has begun multilateral netting of transactions in U.
The National AIDS Information Clearinghouse is a comprehensive information service for persons working with human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS).

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