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Offers a full range of clearing services for broker-dealers, hedge funds, money managers, market makers, short sellers and other professional investors who trade at multiple securities firms.
www.bearstearns.com
BOTCC is a highly rated and financially secure futures and options clearinghouse owned by clearing member firms which trade on the Chicago Board of Trade and the MidAmerica Commodity Exchange.
www.botcc.com
Provider of custody, trust and safekeeping services for corporate and institutional clients.
www.citibank.com
Instruments eligible for DTC's services include corporate equities and bonds, municipal bonds, money market instruments, mortgage-backed bonds, and U.S. treasuries and agencies. DTC’s network links more than 11,000 broker/dealers, custodian bank...
www.dtc.org
Central resource for the clearance, multilateral netting, and risk management of emerging market debt products developed by the International Securities Clearing Corporation and Emerging Markets Traders Association.
www.e-m-c-c.com
Sole provider of automated post-trade comparison, netting, risk management and pool notification services to the mortgage-backed securities market.
www.ficc.com
GSCC's automated system is designed to provide real-time interactive communication facilities for the clearance and settlement of Government debt products.
www.ficc.com
Manduca Trading offers trading access to worldwide exchange traded commodity and financial futures products, forex, and managed futures products.
www.manducatrading.com
Trade execution, clearance, financing and technology consulting services to the professional investor community since 1952.
www.nb.com
Clearing and settlement for streetside equity, corporate and municipal bond transactions in the U.S. Also, serves as a processor of mutual fund orders.
www.nscc.com
Delivers comprehensive brokerage execution, clearance, data processing, and investment products and services to financial organizations worldwide.
www.pershing.com
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Guide to Financial Clearinghouse Firms
The roles of a financial clearinghouseAn exchange clearinghouse uses clearing members which are corporations or partnerships, that are authorized by the clearing house to conduct business. Each exchange has its own clearinghouse. Brokers and brokerage firms work with a financial clearinghouse. Securities clearinghouse firms deal with securities. Clearinghouses can specialize in one kind of trading merchandise.
1. Clearinghouse finance services brokers and exchanges by serving as the repository of sticks, funds, futures, or other merchandise. Financial clearinghouses are governed by the laws of the SEC.
2. At the end of trading sessions, accounts are settled between buyer and seller through the clearinghouse. The Commodity Futures Trading Commission is the governing body for futures trading.
3. Financial clearinghouses are rated by Standard & Poor's and Moody's. All institutions are governed by the rules and regulations of the Securities and Exchange Commission.
Action Steps
The best contacts and resources to help you get it done
Make it your business to know the most important financial clearinghouses
There are several finance clearinghouses that service most traders/brokerage firms in different parts of the world. Depending on where and what you are trading you should be aware of them.
I recommend:
The Depository Trust and Clearing Corporation (and its subsidiaries) is the largest financial services company in the world. It handled the most stock transactions than any other company in 2007. LCH.Clearnet Group is Europe's biggest financial service firm. It is governed by the European Code of Conduct for Clearing and Settlement. Find a list of clearinghouses at the U.S. Commodity Futures Trading Commission site.
Consider the technology behind financial clearinghouse firms
Technology plays a very big role in financial services. You want to make sure that the technology is in place for you to get quick response to your questions and that there is speed in all the transactions you make. Your choices for a clearinghouse depend on the exchange you trade on.
I recommend:
Compared to behemoths like DTCC, HedgeStreet, Inc., as a clearing service looks a little on the small side. It only clears for its Hedge Street hedging investment company. But it is working competitively to keep up with current technology and has a strong customer support attitude. The Clearing Corporation trades only on over-the-counter futures. It doesn't spread itself too thin with too many financial services.
Make a smart choice when you work with an exchange clearinghouse
Clearinghouses are consolidating with one another--in part, because of technology. But also because consolidation offers more opportunities than if they are competing against one another.
I recommend:
The Chicago Mercantile Exchange has its own clearinghouse. It is the largest derivatives clearinghouse in the world and a leader in keeping technology at the forefront of its business. Options Clearing Corporation has a very good reputation and a high rating from Standard & Poor's.
Tips & Tactics
Helpful advice for making the most of this Guide- Using a trading clearinghouse or a financial clearinghouse exchange is really a way of keeping your trading solvent. It is insurance against the risk that someone may not be able to pay for the trade, or have the goods to sell.
