Legal Definitions - stock clearing corporation

A stock clearingcorporation is a subsidiary of the New YorkStock Exchange that acts as a central agency for securities deliveries and payments between member firms. It helps to ensure that trades are settled properly and efficiently.

For example, if a member firm buys shares of a company from another member firm, the stock clearing corporation will facilitate the transfer of ownership and the payment for the shares. This helps to reduce the risk of errors or delays in the settlement process.

Another example is if a member firm sells shares of a company to an individual investor. The stock clearing corporation will ensure that the shares are properly transferred to the investor's account and that the payment is made to the member firm.

Overall, the stock clearing corporation plays an important role in the functioning of the stock market by helping to ensure that trades are settled accurately and efficiently.