Ann: Mick Well REE Drill Program Completed, page-51

How a Clearing Broker Works

Clearing brokers are the backbone of the securities market because their expansive knowledge ensures that the system is dependable and efficient. They must also research and confirm the information they are given and manage funds associated with the transaction.

Clearing brokers not only handle orders to buy and sell securities but also maintain custody of an account holder's securities and other assets (such as cash in the account). Because they have custody of customer assets, carrying firms must maintain higher levels of net capital than introducing firms—and they are responsible for segregating the customer funds and securities in their custody.

A clearing broker helps to make sure that trades are settled appropriately and that the transaction is successful. Once an order is executed, the clearing broker works with a clearing corporation to make sure all funds are handled and transferred properly. Many consider clearing brokers to be the “backbone” of the securities market because their services help make the system simple, reliable, and efficient. Outside of clearing trades, clearing brokers are also involved in researching to confirm the information they are given is exact, and they also manage funds associated with a transaction.