What is a Clearing Member?
Clearing members are individuals or companies that hold a certain class of membership in a clearinghouse. The vast majority of clearinghouse memberships are held by companies, owing to the requirements that most exchange clearinghouse organizations have in place for membership. Privileges extended to the clearing member include the ability to buy and sell underlying securities in accordance with any current regulations that are in place. Along with the privileges associated with client trades, the clearing member also assumes responsibility for all transactions that are executed under the terms of the membership. In the case of a company that is a clearing member, the company will be responsible for backing all obligations associated with the execution of orders on behalf of their clients. The clearing member generally makes arrangements with the client to ensure that the obligations to the clearinghouse will be met in a timely manner. The clearing member will need to meet a number of
Related Questions
- A CCP is an entity that interposes itself between the counterparties to a transaction, becoming the buyer to every seller and the seller to every buyer. What are the benefits of CCP clearing?
- How can I make use of Electronic Clearing Service for receiving funds / making payments?
- What is a Clearing Member?
