Question

Explain the roles of clearing corporation and novation process

Answer 1

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Answer 2

A clearing corporation is an organization associated with an exchange to handle the confirmation, settlement and delivery of transactions. Clearing corporations fulfill the main obligation of ensuring transactions are made in a prompt and efficient manner. Clearing corporations are also referred to as "clearing firms" or "clearing houses."

Novation, in contract law and business law, is the act of: replacing an obligation to perform with another obligation; or adding an obligation to perform; or replacing a party to an agreement with a new party..