Clearing corporations are entities that ensure the smooth functioning of financial markets by acting as intermediaries between buyers and sellers.
They guarantee the settlement of trades by ensuring that both parties fulfill their obligations.
Clearing corporations also manage risk by requiring participants to post collateral and by maintaining a default fund.
They play a crucial role in safeguarding investments by reducing counterparty risk and ensuring the integrity of the financial system.
Clearing corporations are regulated by the Securities and Exchange Board of India (SEBI) and are subject to strict rules and regulations.
Investors can benefit from the services provided by clearing corporations by reducing their exposure to risk and increasing the efficiency of their trades.
Overall, clearing corporations are an essential component of the financial market infrastructure and play a vital role in safeguarding investments.