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Equities Clearing


 When one trades in equities, one is buying and selling stocks through an exchange. These shares of stock, or equities, are securities signifying the shareholder's ownership in a corporation. With every share owned, the person gains a little more of a claim against the given corporation's assets and earnings. So, if the corporation has issued 100,000 shares and one owns 10,000 of them, one owns 10% of the corporation.

There are two types of stocks or equities - common and preferred. With common stock, the shareholder is typically entitled to get paid dividends and would be permitted to vote at shareholders' meetings - so, for instance, he would have a say in hiring or firing the CEO. On the other hand, preferred stock usually does not confer any voting right, but in exchange each one of these shares represents a greater claim on company earnings and assets than the common shares; I.E. preferred stock holders get paid their dividends first and, should the company fail and its assets become liquidated, they receive their share of the liquidated assets first - so, in the event that the company cannot pay everyone dividends as predicted or they don't have enough assets to pay everyone for their shares should they go bankrupt and become liquidated, those with preferred stock would be much more assured of getting paid than those with common stock. 

Equities are considered riskier as investments than bonds or cash. However, these have also yielded the biggest return on investment (ROI) over the long term. When investors deal in equities, they are looking to make bigger gains in a given period of time than they probably would with investments in bonds or cash instruments, and so they accept the relatively greater risk that they may lose money instead of make more of it. It can be said that all investing comes down to risk vs. reward.

The buying and selling of equities requires third party facilitators including market makers and clearing houses. The clearing house is a separate entity, which may be another corporation or a special agency, which is responsible for confirming, settling, and delivering on equities trading transactions. The clearing house, or clearing firm, is supposed to ensure that trading transactions are made in a timely and efficient way and that the trading parties fulfill any and all of their obligations to each other. It acts at once as buyer and seller.

A quality clearing house would be able to offer customized support and reporting solutions making it capable of dealing with clients on a bespoke basis. Its back office systems should very up to date and make use of the latest technologies for trading.

A quality equities clearing house would be able to offer customized support and reporting solutions. Its back office systems should very up to date and make use of the latest technologies for trading. Being capable of dealing with clients on a bespoke basis is also a highly desirable trait.

Equities orders should be dealt with discreetly and with the utmost confidentiality, not used for outside marketing leverage. Straight-through order processing done in real-time should be expected. Simplicity and thoroughness of transaction reporting should also be looked for. 



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EXECUTION

The Kyte Group Limited was founded by David Kyte in 1985 on LIFFE, the embryonic futures exchange in the heart of the City of London.
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Kyte's customers are market professionals, either sole traders, teams of market,
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Providing clearing and settlement services to professional traders who transact business on the world's leading exchanges.
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