Clearing and Settlement
There is usually a division of responsibility between provision of trading facility, and that of clearing and settlement of those trades. While derivative exchanges like the CBOE and LIFFE take responsibility for providing efficient, transparent and orderly trading environments, settlement of the resulting trades are usually handled by clearing houses that serve as central counterparties to trades done in the respective exchanges. For instance, the Options Clearing Corporation (OCC) and LCH.Clearnet (London Clearing House) respectively are the clearing corporations for CBOE and LIFFE. A well known exception to this is the case of Chicago Mercantile Exchange and ICE, which clear trades themselves.
Read more about this topic: Futures Exchanges
Famous quotes containing the words clearing and/or settlement:
“Usually the scenery about them is drear and savage enough; and the logger’s camp is as completely in the woods as a fungus at the foot of a pine in a swamp; no outlook but to the sky overhead; no more clearing than is made by cutting down the trees of which it is built, and those which are necessary for fuel.”
—Henry David Thoreau (1817–1862)
“A Tory..., since the revolution, may be defined in a few words, to be a lover of monarchy, though without abandoning liberty; and a partizan of the family of Stuart. As a Whig may be defined to be a lover of liberty though without renouncing monarchy; and a friend to the settlement in the protestant line.”
—David Hume (1711–1776)