Clearing and settlement of transactions in securities

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Clearing transactions in securities

Clearing houses are the key providers of clearing infrastructure systems and services.

A clearing house eliminates the risk that a party who has entered into a contract for the sale and purchase of securities will fail to complete the transaction. It does this by interposing itself between the parties, becoming the buyer to the seller and the seller to the buyer—each party, therefore, is exposed to the risk of the clearing house, but not to the risk of the other party. Investors trading through a clearing house therefore do not need to be concerned with the identity or credit quality of their counterparties, but only with the credit quality of the clearing house. Clearing houses provide this service in return for a fee and against the provision of collateral or margin by both parties to a transaction.

Assimilated Regulation (EU) 648/2012 (UK EMIR) provides for the authorisation and regulation of clearing

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Latest Financial Services News

Authorities revise UK payments MoU to strengthen regulatory coordination and clarify roles

The Bank of England, Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Payment Systems Regulator (PSR) have published a revised Memorandum of Understanding (MoU) to enhance coordination in the regulation of payments in the UK. The MoU, reviewed annually under the Financial Services (Banking Reform) Act 2013, sets out the high-level framework for cooperation between the authorities. The 2025 revision introduces principles for regulatory cooperation and clarifies roles and responsibilities across policy, supervision, authorisations and strategy. It supports the delivery of the National Payments Vision and reflects the government’s March 2025 announcement to consolidate the PSR’s functions into the FCA, while confirming that the PSR’s remit remains unchanged for the time being. The authorities also published a complementary overview of their respective objectives, regulatory remits and key workstreams in relation to the regulation of payments in the UK.

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FCA's crypto ban reversal unleashes consumer harm risk

Law360, London: The Financial Conduct Authority's (FCA) proposed reversal of its ban on crypto exchange-traded notes for retail investors has paved the way for immeasurable consumer harm, UK and US lawyers have warned.

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