Clearing corporation is an outcome of corporatisation and demutualisation of stock exchange.Clearing corporation being a
company incorporated under the companies act for the purpose of
1. The
periodical settlement of contract and differences thereunder.
2. The
delivery of, and payment for , securities.
3. Any
other matter incidental to, or connected with such transfer.
A recognized stock exchange with
the prior approval of SEBI transfers the duties and function of a clearing
house to a clearing corporation. The clearing corporation in this regard makes
bye-laws and submits to the SEBI for its approval. When SEBI satisfy that
transfer of such duties and function is in the interest of trade and also in
the public interest grants approval to the bye-laws submitted by the clearing corporation.
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