Money & Finance › Markets of the world › Stock exchanges: NYSE and Nasdaq
Clearing houses: DTCC, the Options Clearing Corp. and CME Clearing
DTC 1973; T+1 since May 2024· Institution or agency
Fact, law or dataA rule, statute, definition or measured number.
Central counterparties that step between buyer and seller, guaranteeing and settling trades; DTCC, OCC and CME Clearing dominate in the US.
See it on the Money & Finance map →How it works
When a trade is cleared, the clearing house becomes buyer to every seller and seller to every buyer. It nets trades, so firms pay or deliver only the difference, and it collects margin: cash or bonds posted as a cushion against default. DTCC's units, the Depository Trust Company (1973) and the NSCC (1976), handle US stocks; the Options Clearing Corp. clears all listed US options; CME Clearing handles futures. US stock trades settle one business day later (T+1) since May 2024.
Why it matters
Clearing turns thousands of two-party risks into one guaranteed hub, which is why post-2008 rules pushed standard swaps into clearing houses, concentrating risk there.
Facts, rules and data
DTCC, OCC and CME annual reports and risk disclosures, the SEC's 2023 T+1 and Treasury clearing rules, and the 2010 Dodd-Frank Act's swap-clearing mandate.
Debates and risks
Whether a clearing house could itself fail in a crisis, and who would then pay: its members, taxpayers or the central bank.
Connections (4)
▸London Stock Exchange (LSEG) and the FTSE 100 owns LCH, a giant among Clearing houses: DTCC, the Options Clearing Corp. and CME ClearingFact, law or data
The connection
LSEG became majority owner of LCH in 2013. LCH's SwapClear service clears most of the world's centrally cleared interest-rate swaps, standing between banks on trillions of dollars of notional value each day and holding their margin. That makes a London company a core part of the global plumbing for dollar and euro swaps.
When and why
London; LCH formed in 2003 from the London Clearing House and France's Clearnet, and LSEG bought control in 2013.
How we know
LSEG annual reports, LCH volume statistics, and Bank of England supervision documents on central counterparties.
Debates and risks
After Brexit, how long EU regulators will let EU banks clear euro swaps in London, and how much new EU rules shift to Frankfurt.
▸Clearing houses: DTCC, the Options Clearing Corp. and CME Clearing will soon centrally clear most trades of US Treasury securitiesFact, law or data
The connection
Many Treasury trades, especially by hedge funds and on electronic platforms, still settle between the two parties, leaving each exposed if the other fails. An SEC rule of December 2023 requires clearing of most dealer cash trades by December 31, 2026 and repo trades by June 30, 2027, mainly through DTCC's FICC, with CME and ICE also approved.
When and why
Washington and New York; the rule followed the March 2020 'dash for cash' and the October 2014 'flash rally'.
How we know
The SEC final rule and its February 2025 one-year extension, plus Treasury and Fed reports on market resilience.
Debates and risks
Whether clearing makes the roughly $30 trillion market safer or concentrates risk in a few clearing houses and raises trading costs.
▸Clearing houses: DTCC, the Options Clearing Corp. and CME Clearing demanded billions in extra margin during GameStop meme-stock squeeze (2021)Fact, law or data
The connection
On January 28, 2021, DTCC's NSCC raised Robinhood's required deposit to about $3.7 billion, reflecting the risk of unsettled GameStop trades during the two-day settlement window. Robinhood restricted buying, the demand was cut to about $1.4 billion, and it raised $3.4 billion. The episode sped the shift to T+1 settlement.
When and why
New York, January 28, 2021; the NSCC, Robinhood and other retail brokers.
How we know
The SEC staff report of October 2021, Robinhood's congressional testimony and NSCC filings.
Debates and risks
Whether margin formulas were fair or too opaque for brokers to plan for.
▸OTC derivatives: about $850 trillion notional (2025) were pushed by Dodd–Frank into Clearing houses: DTCC, the Options Clearing Corp. and CME ClearingFact, law or data
The connection
In 2009 the G20 agreed that standard OTC derivatives should be centrally cleared. Dodd–Frank (2010) required it in the US: a clearing house becomes buyer to every seller, collects margin daily and absorbs a member's default. Most interest-rate swaps now clear through LCH or CME Clearing; uncleared swaps must post margin.
When and why
US clearing mandates began in 2013 under the CFTC; Europe followed under EMIR, and margin rules for uncleared swaps phased in from 2016 to 2022.
How we know
CFTC clearing rules, BIS data showing most interest-rate derivatives now centrally cleared, and swap data repository reports.
Debates and risks
Clearing concentrates risk in a few clearing houses; whether they could survive a major member default, and who would rescue them, is debated.