Legal analysis of the function and role of the clearing house in financial derivative transactions

Clearing house is one of the important and basic institutions in the financial derivatives market. This house has been designed in such ways that not only minimize breaches by dealers of their contracts, but also ensures the security and certainty in the market and facilitates the transactions to be settled. This article aims to raise more awareness on the part of the legal community on the functions and roles of the clearing house in the market. Therefore, we will first discuss the house function in the market and how it intervenes in it and then will compare its nature with such legal institutions as open offer, agency, guarantee and novation and finally will conclude that despite some similarities between these institutions, the house nature differs from them in many respects.