Transaction Clearing
/ˈtrænzækʃən ˈklɪərɪŋ/
Definitions
- (n.) The process by which financial trades are validated, confirmed, and finalized, ensuring that obligations between parties are settled.
Transaction clearing is essential to reduce counterparty risk in securities trading.
- (n.) The mechanism by which a clearinghouse or intermediary facilitates the settlement of financial transactions.
The clearinghouse plays a crucial role in transaction clearing to ensure market stability.
Forms
- transaction clearing
- transaction clearings
Related terms
See also
Commentary
Transaction clearing involves a multistep legal and operational procedure critical to finalizing financial market trades, often governed by regulations to protect parties from default risk.
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.