Clearing and settlement

Clearing determines the obligations of trading parties after a transaction and may involve netting and the use of a central counterparty to manage counterparty risk. Settlement is the final transfer of securities and cash, usually through securities settlement systems and custodians. In Switzerland, these functions are part of regulated financial market infrastructure and are essential for safe, efficient capital markets. Legal issues include finality, collateral, default management, operational resilience and cross-border recognition. International transactions may involve multiple systems and foreign rules on settlement discipline and central counterparties.