Clearing institutions are entrusted with settling transactions relating to financial instruments through the central counterparty. As clearing institutions play a pivotal role in stock exchange dealings, the stability of the financial markets is also dependent on the soundness and continuity of these institutions.
What is a clearing institution?
Clearing institutions (also referred to as ‘clearing members’) contribute to the settlement of securities transactions performed on the stock exchange. They fulfil a buffer function for the dealers, on the one hand, and the central counter party, on the other hand. Clearing institutions (i.e. not the central counter party) guarantee the commitments of the traders on behalf of whom they act.
Clearing institutions that engage in clearing activities for their own account are called ‘individual clearing members’ and clearing institutions that (also) act for the account of third parties are called general clearing members.
You are prohibited from being active as a clearing institution in the Netherlands without having been granted a license or a legal exemption to such end. If you violate this prohibition, DNB may impose a cease and desist order or an administrative fine on you. Violation of this prohibition is also an economic offence.
Exceptions to the licence requirement
This requirement does not apply to the clearing institution that:
- has its registered office in the Netherlands and holds a banking licence;
- is domiciled in a different Member States and holds a banking licence granted by the supervisory authority of that Member State and wishes to pursue the business of a clearing institution via a branch in the Netherlands;
- is domiciled in a state designated by the Minister of Finance and wishes to pursue the business of a clearing institution via a branch in the Netherlands;
- is domiciled outside the Netherlands and wishes to pursue the business of a clearing institution by means of cross-border services with the Netherlands.
More information / contact
If you are in doubt as to whether your (proposed) activities qualify you as a clearing institution, we recommend you to consult an expert advisor. If you want to have your substantiated analysis assessed for correctness, you may turn to:
De Nederlandsche Bank N.V.
Expert centre market access
1000 AB AMSTERDAM
Information desk telephone: + 31 20 524 9111(available on working days between 9:00 am and 5: pm)
E-mail address: firstname.lastname@example.org (stating your name, address and telephone number)
Fax: 020 524 1883