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A clearing house is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions. The clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk of a member firm failing to honor its trade settlement ...
An automated clearing house (ACH) is a computer-based electronic network for processing transactions, [1] usually domestic low value payments, between participating financial institutions. It may support both credit transfers and direct debits .
The site functions as a clearing house to allow Americans to compare prices on health insurance plans in their states, to begin enrollment in a chosen plan, and to simultaneously find out if they qualify for government healthcare subsidies. [4]
The Clearing House Payments Company (also known as PayCo), which operates the Clearing House Interbank Payments System (CHIPS) in the U.S. CME Clearing, ICE Clear Credit, and the Options Clearing Corporation, involved in derivatives clearing in the U.S.
The first payment method that required clearing was cheques, as cheques would have to be returned to the issuing bank for payment. Though many debit cards are drawn against chequing accounts, direct deposit and point-of-purchase electronic payments are cleared through networks separate from the cheque clearing system (in the United States, the Federal Reserve's Automated Clearing House and the ...
In the United States, the ACH Network is the national automated clearing house (ACH) for electronic funds transfers established in the 1960s and 1970s. It is a financial utility owned by US banks, and is one of the largest payments networks in the United States, both by volume and by customer reach; virtually every bank account in the US, whether personal or commercial, is connected to the ...
A clearing house acts as the central counterparty to both sides of a CDS transaction, thereby reducing the counterparty risk that both buyer and seller face. 2. The international standardization of CDS contracts, to prevent legal disputes in ambiguous cases where what the payout should be is unclear.
The Options Clearing Corporation (OCC) was founded in 1973, initially as a clearing house for five listed markets for equity options. Prior to its establishment, due to a great deal of encouragement from the SEC, the Chicago Board Options Exchange had its clearing entity, the CBOE Clearing Corporation. [citation needed]