when an investor sells a stock they own they want to know that the money will be delivered to them the clearing firms make sure this happens similarly when someone buys a stock they need to be able to afford it the clearing firm makes sure that the appropriate amount of funds is set aside for trade settlement when someone buys stocks 
clearing banksclearing can have a variety of meanings depending on the instrument with which it is associated in the case of check clearing this is the process involved in transferring the funds promised on the check to the recipient s account some banks place holds on funds deposited by check since the transfer is not instantaneous and may require time to process the federal reserve banks provide check collection services to depository institutions when a depository institution receives a check drawn on another institution it may send the check for collection to the institution directly deliver the check to the institution through a local clearinghouse exchange or use the check collection services of a correspondent institution or a federal reserve bank 1most of the checks the federal reserve banks receives are collected and settled within one business day 1clearinghousesfor futures and options a clearinghouse functions as an intermediary for the transaction acting as the implicit counterparty to both the buyer and seller of the future or option 2 this extends to the securities market where the stock exchange validates the trade of the securities through to settlement clearinghouses charge a fee for their services known as a clearing fee when an investor pays a commission to the broker this clearing fee is often already included in that commission amount this fee supports the centralizing and reconciling of transactions and facilitates the proper delivery of purchased investments 