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clear·ing·house /'klir-iŋ-ˌhau̇s/ n: an institution that arranges for payment of checks owed by one bank to another
Merriam-Webster’s Dictionary of Law. Merriam-Webster. 1996.
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n.A banking establishment where member banks exchange checks and bills all at once, paying only the balances in cash so as to settle daily accounts conveniently.
The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008.
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A body through which futures or commodity trading takes place. It monitors transactions and provides a system for financial settlement. For exchange contracts, namely, transactions conducted through clearing houses, the clearing house also acts as an intermediary for all contracts between brokers. Thus, for any purchase by a client, the broker will have an equal and off-setting purchase contract with the clearing house which will in turn have an equal and off-setting purchase contract with another broker. As a result, the clearing house is exposed to a member's insolvency and guards against this by having rules requiring a margin to be paid, and by having the ability to force a member to close out a position by buying and selling futures on its behalf.+ clearinghouseUSAAlso known as a central clearing counterparty (CCP).An entity that functions as a centralized repository for trades, typically in derivatives, which provides a guaranty that the trade will be fulfilled so that the parties engaging in derivatives trades may avoid assuming the credit risk of their trading counterparties.Related terms
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
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n.1 A place where banks daily exchange the checks, drafts, and other forms of indebtedness that are held by one bank and owed to another, and settle their balances all at one time.2 A place where brokers in stock or commodities exchanges daily settle their debits and credits with one another.3 A place for the exchange of information concerning a specific topic.
Webster's New World Law Dictionary. Susan Ellis Wild. 2000.