Clearing Organization
This Issue in United States
Concept of Clearing Organization in Futures Trading
In this context of financial law, the following is a definition of Clearing Organization: An entity through which futures and other derivative transactions are cleared and settled. It is also charged with assuring the proper conduct of each contract’s delivery procedures and the adequate financing of trading. A clearing organization may be a division of a particular exchange, an adjunct or affiliate thereof, or a freestanding entity. Also called a clearing house, multilateral clearing organization, central counterparty, or clearing association. A clearing organization that is registered with the CFTC is known as a Derivatives Clearing Organization. See Central Counterparty.
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