Question

Which of the following organizations provides clearing services for equity securities?

A. The National Securities Clearing Corporation (NSCC)
B. The Fixed Income Clearing Corporation (FICC)
C. The Options Clearing Corporation (OCC)
D. A transfer agent

Answer 1

The National Securities Clearing Corporation (NSCC), the Fixed Income Clearing Corporation (FICC), and the Options Clearing Corporation (OCC) provide clearing services for different types of securities. A transfer agent does not provide clearing services.

Step-by-step explanation:

The National Securities Clearing Corporation (NSCC) provides clearing services for equity securities. It is responsible for ensuring the efficient transfer and settlement of equity trades. NSCC acts as a central counterparty, taking on the counterparty risk in trades and guaranteeing the completion of transactions.

The Fixed Income Clearing Corporation (FICC) provides clearing services for fixed income securities, such as government and corporate bonds. It helps to facilitate the clearing and settlement of these securities through its clearing and netting systems.

The Options Clearing Corporation (OCC) provides clearing services for options and futures contracts. It acts as a central counterparty, ensuring the delivery and settlement of options and futures trades. OCC also manages the risk associated with options and futures trading.

Transfer agents are responsible for maintaining records of securities ownership and facilitating the transfer of securities between buyers and sellers.