The essence of clearing consists in carrying out so-called "cleaning" of all transactions made in a certain day and by that to minimize number of movements of securities between sellers and buyers. For example, the broker A sold 100 shares of the company "Delta" to the broker of B, the broker of B, in turn, sold 100 shares of "Delta" to the broker In, and that is to the broker D. The clearing organization "clears" the account of the broker of B and the broker In and instructs the broker A to send 100 stocks "Deltas" to the broker D.
If the clearing organization sets as the purpose to define final suppliers and recipients of securities, final payers and recipients of money, it needs only to check performance of obligations. However most often the clearing organization acts not only as a financial settlements center, and assumes function of settlement of positions of participants of the transaction. That is final suppliers of securities and payers of money pay off not with each other, and with the clearing organization, and the last pays off already with each participant.
After securities underwent procedure of listing and are included in a quoted leaf, with them it is possible to carry out operations on the stock exchange, that is to conclude bargains of purchase and sale. Exchange operation is understood as the transaction of purchase and sale with the values allowed on the exchange concluded between participants of exchange trade in the exchange room at the scheduled time.
At system of multilateral clearing the clearing corporation defines so-called "position" for each participant of clearing is a difference (or balance) between all requirements and all obligations of the given participant for transactions for the determined time period (for example, in one exchange day). If the balance is equal to zero, the position is considered closed. If the balance positive, that is the volume of requirements of this participant exceeds his obligations under transactions, say that the participant has a long position. If the participant of clearing has to more, than owe it (that is the balance is negative, it means that the participant has a short position. Following the results of multilateral clearing comes to light, what sum of money or securities each participant at the final stage of the transaction has to receive.
Cash purchase is characterized by that it consists on the securities available at the seller. Calculation for cash purchases, that is delivery of securities by the seller to the buyer and payment by their buyer, is carried out in the next days after the conclusion of the transaction.
The transaction is considered executed when the depositary makes a transfer of securities on custody accounts and will transfer to the clearing organization and participants of trade the relevant documents, that is extracts from custody accounts about the made transfers.