Clearance

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Clearance

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.

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 classic literature ?
Several other bulls, growling and barking, closed in toward the clearing, but they were all much farther from the balu and the panther than was Tarzan of the Apes, so it was that Sheeta and the ape-man reached Teeka's little one almost simultaneously; and there they stood, one upon either side of it, baring their fangs and snarling at each other over the little creature.
Thus they stood while Teeka came across the clearing, going more slowly as she neared the panther, for even her mother love could scarce overcome her instinctive terror of this natural enemy of her kind.
Now she sat upon a high branch, safe out of harm's way, cuddling the little thing close to her hairy breast, the while her savage little eyes bored down upon the contestants in the clearing, and her ferocious voice urged Taug and the other bulls to leap into the melee.
Presently the entire company filed on across the clearing and disappeared in the jungle upon the opposite side.
An hour later he came to the edge of the clearing before the village.
The trail was broad, and they were walking side by side so that at a sharp turn the park-like clearing was revealed to them simultaneously with the outlines of the machine they sought.
Tossing discretion aside, she commenced to circle the clearing. Only from Numa did she attempt to conceal her presence.
A white man, hiding in a thorn boma, half rose as the young girl leaped into the clearing and dashed toward the kid.
He also cited the best practices of some LGUs particularly Marikina City and Valenzuela City which both strengthened the implementation of the ordinances on road clearings as well as the coordination with the barangay officials which serves as their front-liner.
Eurex Clearings offer to accelerate the development of a liquid, EU based alternative for the clearing of interest rate swaps gains broad market support.
On average, says DeFries, "the size of the clearings used for cropland is about twice as large as the size of the clearings used for pasture." Large clearings tend to fragment forest into small chunks that could isolate vulnerable species, she says.
Our own imaginings, our trips to the clearings prepare us to re-cast ourselves as Denver does.

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