Clearing (finance)

clearingclearing bankbankers' clearing houseclearedclearclearing systemclearing and settlementclearing firmclearing housesClearing systems
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled.wikipedia
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Clearing house (finance)

clearing houseclearing housesclearinghouse
Clearing houses were formed to facilitate such transactions among banks. To reduce the risk associated with failure to deliver on the trade on settlement date, a clearing agent or clearing house often sat between the trading parties.
A clearing house is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions.

Settlement (finance)

settlementsettledsettle
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. This caused a few days delay between the trade date and final settlement.
A number of risks arise for the parties during the settlement interval, which are managed by the process of clearing, which follows trading and precedes settlement.

Cheque

Checkingcheckchecks
This process turns the promise of payment (for example, in the form of a cheque or electronic payment request) into the actual movement of money from one account to another.
This was the first bankers' clearing house.

Real-time gross settlement

RTGSReal time Gross settlementReal Time Gross Settlement (RTGS)
In general, these are the major payment clearing or real-time gross settlement systems of individual countries, but in the case of Europe, there are certain pan-European payment systems.
RTGS systems are typically used for high-value transactions that require and receive immediate clearing.

Federal Reserve

FedFederal Reserve SystemFederal Reserve Banks
In the United States, the Federal Reserve System is a SIPS.
Because some banks refused to clear checks from certain other banks during times of economic uncertainty, a check-clearing system was created in the Federal Reserve System.

TARGET2

TARGETSingle Shared platform
TARGET2 is a pan-European SIPS dealing with major inter-bank payments.
TARGET2 is also an interbank RTGS payment system for the clearing of cross-border transfers in the eurozone.

Central securities depository

central securities depositoriesInternational Central Securities Depositorysecurities depositories
With the advent of electronic settlement, and a move to dematerialisation of securities, standardised clearing systems were required, as well as standardised securities depositories, custodians and registrars.
This allows brokers and financial companies to hold their securities at one location where they can be available for clearing and settlement.

Automated clearing house

ACHDirect DepositACH payment
Though many debit cards are drawn against chequing accounts, direct deposit and point-of-purchase electronic payments are cleared through networks separate from the cheque clearing system (specifically the Federal Reserve's Automated Clearing House and the private Electronic Payments Network.)
Clearing (finance)

Society for Worldwide Interbank Financial Telecommunication

SWIFTSociety for Worldwide Interbank Financial Telecommunication (SWIFT)SWIFT network
SWIFT
SWIFT transports financial messages in a highly secure way but does not hold accounts for its members and does not perform any form of clearing or settlement.

LCH (clearing house)

LCHLCH SALondon Produce Clearing House
One example was the London Clearing House (later renamed LCH.Clearnet), which, since the 1950s, cleared derivatives and commodities for a number of London exchanges.
LCH provides clearing or central counterparty services in the following markets:

Payment system

payment networkpayment systemspayments system
Payment system
Clearing

Finance

financialfinancesfiscal
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled.

Financial transaction

transactiontransactionsfinancial transactions
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled.

Payment

compensationpaymentspayee
This process turns the promise of payment (for example, in the form of a cheque or electronic payment request) into the actual movement of money from one account to another.

Financial statement

financial statementsfinancial reportingfinancial report
Processes included in clearing are reporting/monitoring, risk margining, netting of trades to single positions, tax handling, and failure handling.

Margin (finance)

marginmargin callmargin trading
Processes included in clearing are reporting/monitoring, risk margining, netting of trades to single positions, tax handling, and failure handling.

Set-off (law)

set-offnettingset off
Processes included in clearing are reporting/monitoring, risk margining, netting of trades to single positions, tax handling, and failure handling.

Tax

taxationtaxeslevy
Processes included in clearing are reporting/monitoring, risk margining, netting of trades to single positions, tax handling, and failure handling.

Systemically important payment systems

Systemically important payment systems (SIPS) are payment systems which have the characteristic that a failure of these systems could potentially endanger the operation of the whole economy.

Euro Banking Association

STEP2
STEP2, operated by the Euro Banking Association is a major pan-European clearing system for retail payments which has the potential to become a SIPS.

Debit card

debit cardsdebitcard
Though many debit cards are drawn against chequing accounts, direct deposit and point-of-purchase electronic payments are cleared through networks separate from the cheque clearing system (specifically the Federal Reserve's Automated Clearing House and the private Electronic Payments Network.)

Electronic Payments Network

Though many debit cards are drawn against chequing accounts, direct deposit and point-of-purchase electronic payments are cleared through networks separate from the cheque clearing system (specifically the Federal Reserve's Automated Clearing House and the private Electronic Payments Network.)

Trade date

This caused a few days delay between the trade date and final settlement.

Settlement date

settlement price
To reduce the risk associated with failure to deliver on the trade on settlement date, a clearing agent or clearing house often sat between the trading parties.

Delivery versus payment

payment versus paymentdelivery-versus-paymentDVP (Delivery Versus Payment)
This process is known as delivery versus payment.