Who is a Clearing Member? Can he participate in trades?

General
1

I assume Zerodha is a Trading Member, in that case who is the Clearing Member of zerodha (one who does settlement)?

Is the hierarchy built like this?

Clients (Retail Traders) --> Zerodha (Trading Member) --> XXXX (Clearing Member) —> NSE

Does a clearing member participate in trades?

1 Like
2

In the system there are 3 kinds of clearing members:-

  1. Clearing member cum Trading member:- Who settles his own (pro/clients) trades & others if any.

  2. Self clearing members:- These guy’s settles/ clear’s there own trades.(pro/clients)

  3. Professional Clearing Members:- These members only settles the trades/transactions of the Trading members , whose obligation’s they have accepted to clear or settle.

I think Zerodha’s clearing member is IL&FS.

Clearing members are basically guarantees the settlement of the trades done in the respective exchanges.

Coming to your question , it depends on the category where he belongs to. As explained the first two members can trade in market provided maintain a unique/separate team.

2 Likes