Clearing and Settling Facility and Corporate Debt Trades

What this video covers

• When the ADF rule binds a member and requires an ADF-eligible security that is eligible for net settlement to clear through a registered clearing agency using continuous net settlement
• The three acceptable ADF clearing routes: direct participation, direct clearing services, and a correspondent arrangement with another member that clears through the agency
• Why a correspondent must actually clear trades through a registered clearing agency to satisfy the ADF rule
• How a Trade Reporting Facility Participant differs from a general member, and why designated securities include all national market system (NMS) stocks without an added net-settlement qualifier
• Why ex-clearing settlement requires agreement from both parties, so one side cannot force it
• When the corporate debt rule binds a member or its agent that participates in a registered clearing agency for over-the-counter (OTC) securities transactions
• How the carrying-member exception and Financial Industry Regulatory Authority (FINRA) discretionary exemption affect corporate debt clearance