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Clearing Broker
Practical Law Glossary Item w-001-0374 (Approx. 3 pages)
Glossary
Clearing Broker
Broker-dealers that carry the customer accounts (hold customer funds and securities) of “introducing” or “correspondent” broker-dealers and provide services to those customer accounts, including:
- Clearing (arranging for payment and delivery for customer securities transactions).
- Maintenance of customer books and records.
- Receipt, delivery, and custody of customer funds and securities.
- Extending credit to finance customer transactions through margin accounts.
- Executing customer transactions on exchanges or in over-the-counter markets.
For further information, see Practice Note, Broker-Dealer Registration: Overview and Practice Note, Determining Broker-Dealer Status.