Clearance and Settlement

The clearing and settlement process generally involves two steps: trade comparison and delivery. For exchange-listed securities traded over-the-counter, trade comparison is made by each party’s clearing firm on one of FINRA’s trade reporting facilities. The reporting facilities “lock in” the trade and send it to a clearinghouse.

A clearinghouse, also called a clearing facility or a clearing corporation, is the entity that clears trades for an exchange. The National Securities Clearing Corporation (NSCC) is the largest clearinghouse. It clears a