noun, plural clear·ing·hous·es [kleer-ing-hou-ziz]. a place or institution where mutual claims and accounts are settled, as between banks. The Department of Community Affairs clearinghouse for budget reports was missing 2019 data for about 40 towns. McReynolds’ two-year-old organization became a clearinghouse for a nation struggling to adapt.
What is a clearinghouse & how does it work?
A clearinghouse is a mediator between two firms (which may or may not know each other) engaged in a financial transaction (wherein one party is a buyer and another party is a seller in the said transaction), taking the exact opposite positions for each firm. In addition, it ensures no risk of default in the transaction. How does Clearinghouse Work?
What is the difference between a clearinghouse and a broker?
A broker is a person or entity through with customers can access the financial markets and place trades. The clearinghouse handles the back office operations after the trade is placed, ensuring the trade is cleared. Can a Clearinghouse Fail?
Is the NYSE a clearinghouse?
The NYSE and the Nasdaq are both exchanges and clearinghouses. Financial clearinghouses are intermediaries between those who buy and sell financial instruments. Clearinghouses can be made up of an agency or a separate corporation of a futures exchange and are registered with the Securities and Exchange Commission (SEC).
