Clearinghouse
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The role of the clearinghouse is an essential component of every securities market, whether it be a stock market, a bond market, or an options market. -
A clearinghouse can also refer to an institution responsible for settling payment obligations between two institutions within the same country's financial system. -
A clearing bank is an institution that holds customer funds and performs clearing functions for other banks. -
The term "clearinghouse" originates from the literal function of the structure: to clear (or settle) transactions from the "exchange house" or "banking house", in which the transaction has been conducted.