Expert Chaslau Koniukh
  • Biography
  • Analytics
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Market terminology
  • Stock Market
  • World exchanges
Clearing activity in the market

What is a clearing activity in the market and its advantages

27.07.2020
2 min read

In which cases clearing activity is performed on the market

Clearing activity on the market is a procedure for releasing payment obligations between subjects. A concept for the securities market is used. In simple words – this type of operation allows not paying for the transaction in cash, if this point is agreed by the counterparties and the method of settlement is accepted.
The first place where clearing activity on the market starts is the subject of the transaction. After the contract between the buyer and seller is made out, which allows the transaction to purchase assets of one party and the receipt of money by the other. But this example is ideal, which is almost never met. Most often the seller and the buyer do not cooperate directly, all functions are taken over by intermediaries. The duties of the latter include the organization of the procedure of registration of the transaction and guarantee compliance with the agreements.
Digital solutions simplify the trading process by accelerating the processing of large amounts of data. Special programs automatically register and record transactions, maintain a register of commitments, their warranty and a number of other important information.
Exchange members are companies and individuals from around the world who trade in goods, securities or services.

Clearing activity in the market

The purpose of clearing activities in the market is the calculation and control of the obligations assumed. The transaction should be executed taking into account the peculiarities of payment repayment. The regulator of clearing activity is the Federal Law. One of its conditions is to obtain a license from the Central Bank. In addition, the law sets out the types of activities that prohibit companies from clearing. Another important factor is considered capitalization – for this type of procedure it must be at least 100 million rubles.

Features of clearing operations

The concept of clearing operations includes compensation transactions. They can be complete, partial or without collateral. At the first variant the probability of financial losses is practically reduced to zero. For this purpose there should be a necessary amount of funds on accounts of participants of the transaction. In case of partial maintenance the parties can have only a part of necessary money on the account or confirmation from other contracts.
Without collateral assumes transaction realization, even if on the account there are no means. But such a variant of compensatory transactions has a high risk level.
There are several types of clearing activities:

  • simple clearing. In this case the liabilities calculation is performed separately for each transaction and its participants;
  • multilateral – duties are calculated jointly for the parties;
  • centralized – transactions pass through the accounts of the clearing company, which has the same rights as the participants of the transaction.

Different types of clearing can be combined with each other, and the intermediary company itself chooses what option to use in this situation.

Share
0
Previous Post Will oil cost $100 per barrel: forecast Next Post ExxonMobil: history of origin

You Might Also Like

prop trading
Market terminology
What is prop trading?
12.02.2021
volatility index
Market terminology
What is the volatility index?
05.10.2020
a margin requirement
Market terminology
Margin requirements for the stock market: essence of the concept
07.07.2020
oscillators in trading
Market terminology
Oscillators in trading: advantages and disadvantages of instruments
23.01.2021
currency intervention
Market terminology
Currency intervention as an instrument for adjusting the national currency rate
05.09.2020
third-tier stocks
Market terminology
Third tier stocks: risks and benefits of risky assets
07.06.2020

Recent Posts

  • 1the best currency for savings
    BKS Broker: the best currency for savings
    28.02.2021
  • 2second wave of contagion
    How the second wave of contagion will affect the cost of the cryptocurrency
    27.02.2021
  • 3China's economic recovery
    How China’s economic recovery is going: a review of the processes
    26.02.2021
  • 4Wendy Deng
    Wendy Deng: How a poor Chinese girl became one of the most powerful women in the world
    25.02.2021
  • 5PNC Financial Services Group
    Financial Corporation PNC Financial Services Group
    24.02.2021

Popular Posts

  • How China’s economic recovery is going: a review of the processes 0
  • How foreign investments are distributed in the world 0
  • Strong economies: development and prospects for Iceland 0
  • What to do when the stock exchanges are falling: analyze the fall of the indexes 0

Social

Editor's Picks

Chaslau Koniukh

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Spokesperson
17.08.2020
Expert Chaslau Koniukh

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Spokesperson
18.06.2020
expert Chaslau Koniukh

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Spokesperson
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Spokesperson
16.05.2020

Latest Posts

the best currency for savings
BKS Broker: the best currency for savings
28.02.2021
second wave of contagion
How the second wave of contagion will affect the cost of the cryptocurrency
27.02.2021
China's economic recovery
How China’s economic recovery is going: a review of the processes
26.02.2021

Chaslau Koniukh

Expert Chaslau Koniukh

Chaslau Koniukh is an international financial expert, a professional investor, an experienced analyst and a practicing trader. He advises European entrepreneurs; holds lectures on investment topics; is the author of scientific articles on work at the stock market.

Recent Posts

  • 1the best currency for savings
    BKS Broker: the best currency for savings
    28.02.2021
  • 2second wave of contagion
    How the second wave of contagion will affect the cost of the cryptocurrency
    27.02.2021
  • 3China's economic recovery
    How China’s economic recovery is going: a review of the processes
    26.02.2021
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Youtube
  • Instagram
  • Biography

Expert Chaslau Koniukh: brief biography and path of formation

Let’s Socialize