Clearing House
/ˈklɪərɪŋ ˌhaʊs/
Definitions
- (n.) An organization or system that facilitates the settlement of transactions between parties, especially in finance and commodities, by ensuring the transfer of payments and securities.
The clearing house reduced the risk of default by guaranteeing trade settlements.
- (n.) A central agency that reconciles and finalizes transactions among banks or financial institutions to streamline payment processes.
Each bank submits daily net obligations to the clearing house for verification.
Forms
- clearing house
- clearing houses
Related terms
See also
Commentary
In legal drafting, clarity on the role of a clearing house in risk management and transactional finality is essential, particularly in financial regulations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.