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// definition

Clearing member

Member of a central counterparty

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Markets & clearing

Short definition

A firm that settles margins and obligations for its own positions and those of its clients at a central counterparty. If a client misses a margin call, the member still owes the clearing house and bears step-in liquidity risk.

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Intuition

The clearing member is the bridge between client and clearing house. It passes on margin and remains responsible for settlement to the CCP.

Why it matters now

If a client runs short of cash, stress moves to the bank providing clearing and, sometimes, funding.

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