A financial clearinghouse firm provides services for companies that aid in the settlement of accounts, drawing up new contracts and additional credit services. In order to work for financial clearinghouse firms, a person must have a basic education in finance and the economy. In addition to that, there are many other resources available through organizations and online that offer classes. These classes cover a variety of exchange clearinghouse topics.

A trade clearinghouse firm will often provide its employees with the training that they need. But to really make it with a financial clearinghouse, you will probably need to supplement that training with some additional courses. To accomplish this, you need to find financial clearinghouse firms education and training resources such as:

1. Online courses on a variety of financial clearinghouses topics.

2. In-person classes that provide a traditional classroom approach.

3. Seminars and workshops for quick learning.

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Take online courses to work in the financial clearinghouse market

For those that already have a basic understanding of financial concepts, online courses are a way to learn specific skills while saving time and money. Many financial organizations and institutions offer online training that covers topics such as payment solutions, risk management and other topics.

I recommend: The Southern Financial Exchange offers a variety of clearinghouse courses covering automated clearinghouse (ACH) payment solutions and risk management. Incisive Media's CIFT Financial Training Solutions offers a variety of e-learning tools and financial courses to develop skills for clearinghouse firms.

Choose brokerage clearinghouse in-person courses

Another way to learn the financial skills and techniques you need for a financial clearinghouse firm is to look for classes offered by universities and colleges as well as other organizations in the financial sector. Classes can last anywhere from a few weeks to a semester.

I recommend: Depository Trust and Clearing, one of the largest financial clearinghouses, offers a number of training programs to work for the clearinghouse, including an entry level training program for programmers. The Global Financial Markets Institute offers a course to learn skills needed for working in a financial futures clearinghouse.

Attend workshops and seminars to develop skills for working with a financial clearinghouse exchange

There are continuing educational opportunities through short workshops and seminars for those that already work in financial clearinghouses. These training programs teach one or two specific skills or concepts and can last just a few hours or a full weekend.

I recommend: Wall Street Prep offers live seminar training for those that want to learn about more advanced topics in finance and investment banking. The Northwest Clearinghouse Association provides a long list of financial clearinghouse webcast seminars that teach the rules, regulations and skills needed to work in this field.

A financial clearinghouse is responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery and reporting trading data. Financial Clearinghouse Firms act as third parties to all futures and options contracts--as a buyer to every clearing member seller and a seller to every clearing member buyer.

An 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.

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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.

A financial clearinghouse is a type of third party for commodities, securities and futures trading. The job of the financial clearinghouse is to ensure that both parties arrive with the proper amount of funds and/or commodities to trade. Financial clearinghouses also serve another purpose after the initial trade. They take part in maintaining the performance bond of the transaction. Financial clearinghouses are essential for brokers and companies in all types of trading.

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Trading accounts

Trading accounts are the accounts that hold the stocks or securities to be traded. The job of the financial clearinghouse is to settle these accounts with a trade between two or more parties.

I recommend: Investopedia offers a detailed definition of trading accounts.

Futures contracts

A futures contract represents a transaction for buying or selling commodities or stock at a certain price in the future. This is a common tool in the hedge and speculation markets.

I recommend: Risk Glossary offers an explanation of the difference between futures contracts and forward contracts, which are not traded through financial clearinghouses.

Securities, ETFs

A security is anything that represents a specific financial value in a market. This can be stocks, bonds, equity or debt securities. Most types of securities can be traded through a financial clearinghouse. A security traded on any market is commonly known as an exchange-traded fund, or ETF.

I recommend: Bloomberg offers current trading prices and frequently asked questions about exchange-traded funds.

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission is the regulatory body that oversees the securities industry. This government commission is in place to protect investors and maintain the integrity of the market.

I recommend: The SEC website gives a detailed explanation on the history and function of the SEC as well as information for investors, advisers and brokers.

Commodity Futures Trading Commission (CFTC)

The Commodity Futures Trading Commission works similarly to the SEC. The CFTC oversees the futures and options markets with market surveillance and oversight advisers to prevent abuses of the system.

I recommend: The CFTC website provides information on the commission, information for customer protection and a variety of market reports.

Solvency

Solvency in the financial world refers to the ability of a company or individual to pay debts with cash on hand. If a company has good solvency, it will have a good financial standing.

I recommend: D&B offers a glossary of solvency ratios that help to determine the financial soundness of any business based on assets and liabilities.