Definition, Meaning & Synonyms

clearinghouse

noun

/ˈklɪrɪŋ haʊs/

Definition

A clearinghouse is an intermediary organization that facilitates the exchange of payments, securities, or data among participants, typically in a financial context.

Examples

A financial clearinghouse helps execute trades and settle payments swiftly between parties.
The stock exchange has a clearinghouse that manages the risks involved in securities trading.
During the auction, the clearinghouse ensured all bids were processed correctly and settlements made on time.

Meaning

In finance, a clearinghouse acts as a central party to financial transactions, ensuring that trades are processed and settled efficiently. It reduces risk by guaranteeing that the transactions will be completed, helping to manage the relationship between buyers and sellers.