Clearing House

An institution that processes financial transactions, such as the exchange of securities, between two parties.

More Details

A clearing house is a financial institution that acts as an intermediary between two parties in a financial transaction. Its main function is to ensure the smooth and efficient settlement of transactions between the two parties.

Example

If you were to buy shares of a publicly traded company through a brokerage firm, the trade would be cleared through a clearing house. This helps to reduce risk and increase the efficiency of your transaction.

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