A Clearing Member is a licensed financial institution or brokerage firm authorised by an exchange’s clearing house to clear and settle trades. They act as an intermediary between traders and the exchange, ensuring that every transaction is properly confirmed, margined, and settled according to regulatory and exchange requirements.
Clearing Members are fundamental to maintaining the safety and stability of the financial system. They provide guarantees on trade performance, meaning that if one party defaults, the clearing house, through the Clearing Member, ensures that the trade is completed. This significantly reduces counterparty risk and promotes trust and liquidity in the market.
Functions of a Clearing Member
Clearing Members perform several key responsibilities within the derivatives ecosystem:
- Trade Settlement – Verifying, matching, and finalising trades to ensure smooth completion.
- Margin Management – Collecting and maintaining adequate collateral to cover open positions.
- Risk Management – Monitoring exposure and managing credit and operational risks for clients.
- Regulatory Compliance – Adhering to strict capital, reporting, and governance standards set by the exchanges and regulators.
Through these functions, Clearing Members contribute to market transparency, efficiency, and integrity, critical elements of a well-functioning trading environment.
Clearing Membership in Singapore
In Singapore’s derivatives market, exchanges such as the Singapore Exchange (SGX), ICE Futures Singapore (ICE SG), and the Asia Pacific Exchange (APEX) appoint licenced Clearing Members to facilitate post-trade clearing and settlement.
A Clearing Member supports institutional, corporate, and professional traders by providing secure trade clearing, robust operational processes, and reliable market access.
Why It Matters
The role of a Clearing Member is central to the integrity and resilience of financial markets. By guaranteeing trade completion and managing systemic risks, Clearing Members provide confidence to market participants and contribute to overall financial stability.
Start Trading with Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team’s round-the-clock availability on trading days to provide assistance for all your trading needs.
