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Siddhartha Kumaran
More curious than the cat!
Asked a question 9 months ago

Why is a clearing corporation required in an exchange?

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Without a clearing corporation, markets will not have the confidence to transact in large volumes. A CC is there to ensure that trades are settled as per the commitments and they also guarantee the settlement of trades on the exchange. So, in short, they help preserve the sanctity of financial transactions and instill confidence among all market participants. 

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