When you’re making transactions at a high level, you want to know that everything is going to go off without a hitch. Sadly, it’s a fact that, when you are operating at this level, there are a number of factors, from one party facing financial difficulties to Brexit, which can throw a spanner in the works. This is why so many investors and businesses will not commit to a transaction without using clearing services. Here are just a few of the reasons why what they do is so essential.
A Brokerage Clearing Service Is There To Keep Things Moving
The simplest way to start is by stating that the purpose of a brokerage clearing service is to make sure that a transaction goes as smoothly and as quickly as possible. They are an independent company with the necessary knowledge to avoid any speedbumps and get through any legal issues without causing any additional headaches for either party.
A Brokerage Clearing Service Handles The Paperwork
We all know how quickly parties on either side of the transaction can find themselves mired in paperwork. Hiring a brokerage clearing service means that all of this is taken off your plate. They will make sure that all the books and records are kept up to date. Hiring a service with local knowledge will also give you greater peace of mind.
A Brokerage Clearing Service Gives You Greater Security
It goes without saying that there is a lot of anxiety around transferring a significant amount of capital. You want to know that you aren’t going to send a huge amount of money only to find that the deal has fallen apart and there is no way of getting it back. When you use a brokerage clearing service, they assume responsibility of the relevant securities and they will work in tandem with the clearing firm to ensure everything goes smoothly for clearing and custody.
Now, you may ask: what is the difference between a clearing firm and a custodian firm? Well, a custodian firm holds the assets while clearing services can vouch that both parties involved can afford to pay their debts. In the last three years alone, Global Investment Strategy has administered 250,000 transactions that exceed £50 billion, and they offer an experienced, transparent and trustworthy service across many different countries.
A Brokerage Clearing Service Will Ensure Accuracy
We all work incredibly hard to do our due diligence to ensure that every single piece of information relating to a transaction is correct. However, when there are so many moving parts in a transaction and with the markets as chaotic as they can sometimes be, we could all use a little extra reassurance. A brokerage clearing service will conduct an independent study of all the information to make sure everything is 100% accurate.
A Brokerage Clearing Service Can Offer Credit
We all hope that we never find ourselves in the position where we need a little extra financial help to conclude a transaction. However, should this eventuality occur, clearing brokers can extend credit through margin accounts to make sure the deal goes through.