Clearing Broker or Member

An exchange member authorized to deal directly with the clearing corporation when settling a trade executed on the exchange floor or through an electronic order matching system. Parties to every trade exchange names or other information identifying their clearing member. The clearing member is responsible for any collateral or cash exchanges with the clearing corporation, carries the position, and is responsible for its ultimate settlement or disposition. Most investors find it convenient to deal with a limited number of Clearing Brokers. If they want the services of a larger number of executing brokers, they will ask the executing brokers to 'give up' the trade to a clearing broker and the executing and clearing brokers will share the commission. See also Non- Clearing Member.

Glossary * C