A Clearing Member (CM) is essentially a broker or financial firm that has been authorized by the National Clearing Company of Pakistan Limited (NCCPL).
The CM's main role is to:
Finalize Trades: They are responsible for making sure that when you buy shares, you actually receive them, and when you sell shares, you receive your money. This includes the transfer of both securities and funds.
Manage for Clients: They handle these settlement duties not just for their own trading, but also for all the trades made by their clients (like individual investors or other smaller brokers).
Handle Risks: They also play a part in managing the financial risks involved in these transactions, such as ensuring proper margins are maintained.
In essence, a Clearing Member acts as an intermediary, ensuring that the promises made during a trade on the PSX are actually fulfilled, keeping the market running efficiently and securely.