clearance

(noun)

In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction.

Related Terms

Examples of clearance in the following topics:

  • Securities Acts Amendments of 1975

    • The 1975 amendments are to establish a national market system for the nationwide clearance and settlement of securities transactions.
    • The 1975 amendments, also called the National Exchange Market System Act, directed the securities and exchange commission to work with the industry toward establishing a national market system together with a system for the nationwide clearance and settlement of securities transactions.

  • Managing Float

  • Payments

    • Clearance float, or the time spent for a payment to clear the bank.