Broker Clearing Firms List
Find out which brokers use which clearing firms to settle trades.
As a way of protecting parties in the event of a trade, clearing firms are often used. A clearing firm takes responsibility for the transaction, and guarantees that it will go through in the end. Brokers use them to settle investment transactions. However, it's important to note that some brokers are self-clearing, meaning that they have their own clearing firm while others use a third party to clear the transactions.
In many cases, the largest clearing firms handle a large number of transactions, from various broker-dealers each day.
- Apex Clearing
- Broadcort & Merrill Lynch Professional Clearing Corp.
- FOLIOfn, Inc
- Goldman Sachs Execution and Clearing LP
- J.P. Morgan Clearing Corp.
- National Financial Services LLC
- Pershing LLC
- RBC Correspondent Services
- StoneX
- Southwest Securities Inc.
- Wedbush Securities Inc.
- Webull Financial LLC
- Open to the Public Investing Inc.
Some of the names on the list are rather well-known and familiar to most people. It's also worth noting that the clearinghouses are protected by the Securities Investor Protection Corporation (SIPC), so it means that you, the investor, have some protection as well.
Which Brokerage Firms Use Which Clearing Firms?
You don't necessarily want to base your decision about a broker entirely on the clearing firm used. It can provide you with some insight into what to expect from that broker.
Here are some of the clearing firms used by some of the major brokers:
| Firm | Clearing House | Self-clearing? |
|---|---|---|
| Ally Invest | Apex Clearing | No |
| Ally Invest Managed Portfolios | Apex Clearing | No |
| Betterment | Apex Clearing | No |
| Charles Schwab | Charles Schwab Clearing Services | Yes |
| E*TRADE | E*TRADE Clearing LLC | Yes |
| Ellevest | Folio | No |
| Fidelity Go | National Financial Services, LLC | Yes |
| J.P. Morgan | J.P. Morgan Clearing Corp | Yes |
| Fidelity Investments | National Financial Services, LLC | Yes |
| Firstrade | Apex Clearing | No |
| FutureAdvisor | National Financial Services LLC | No |
| Interactive Brokers | Self-Clearing | Yes |
| Lightspeed Trading | Wedbush Securities | No |
| M1 | Apex Clearing | No |
| MEGI | Merrill Lynch | Yes |
| Merrill Edge | Merrill Lynch | Yes |
| OpenInvest | Apex Clearing | No |
| Empower | Pershing Advisor Solutions | No |
| Rize | Apex Clearing | No |
| Robinhood | Clearing by Robinhood | Yes |
| SoFi Wealth | Apex Clearing | No |
| SogoTrade | Apex Clearing | No |
| Stash Invest | Apex Clearing | No |
| Stockpile | Apex Clearing | No |
| Tastyworks | Apex Clearing | No |
| TD Ameritrade | TD Ameritrade Clearing, Inc. | Yes |
| TradeStation | TradeStation | Yes |
| Twine | Apex Clearing | No |
| Ustocktrade | Electronic Transaction Clearing | No |
| Vanguard | Vanguard Brokerage Services | Yes |
| Wealthfront | RBC Clearing & Custody | No |
| Wealthsimple | Apex Clearing | No |
| Axos Invest | Apex Clearing | No |
| Zacks Trade | Interactive Brokers LLC | No |
| Webull | Apex Clearing | No |
| Public | Apex Clearing | No |
| Acorns | RBC Correspondent Clearing | No |
As you can see, many of the biggest brokers are also self-clearing. Even if a brokerage firm uses a clearing company, many of them use subsidiaries that they own outright.
Many of the smaller brokers rely on third party clearing firms to help them make sure that everything proceeds as it should. It takes a certain number of resources to perform clearing services, and many of the smaller companies just don't have those resources.
It is also important to remember that broker-dealers can change clearing firms. So, even if a broker uses one clearing firm now, the broker may switch to another clearing firm later. For the most part, though, the clearing firm isn't a huge deal to the majority of ordinary investors. As long as the clearing firm used is reputable, the focus should be on finding the best online broker to fit your investing needs and preferences.
How Do Clearing Firms Make Money?
Clearing firms make money by facilitating transactions between traders and another party, like a stock broker. Clearing companies are responsible for ensuring that transactions settle, and in exchange, they receive a clearing fee.
Passive investors aren't too likely to notice these fees since clearing fees are often quite small. However, active traders may notice them add up over time. You can use a variety of discount brokers if you're looking to keep trading fees as low as possible.
Bottom Line
While you might not realize it, clearing firms are the middleman that keep trades running smoothly. In fact, the leading clearing houses process billions of transactions annually, which is trillions of dollars in value.
Hopefully, our list of clearing houses gives you a better understanding of what's happening behind the scenes.
So what’s the difference between a “clearing house” and the legally registered “clearing agencies” on the SEC’s website? https://www.sec.gov/tm/clearing-agencies
None of the clearing houses listed are on that website, but I’m assuming you mean “clearing broker” when you say “clearing house”: https://www.investopedia.com/terms/c/clearingbroker.asp
Robinhood has stated that their decision to restrict purchases of certain stocks this past week was based on capital requirements which in many cases increased significantly on certain stocks. I don’t understand exactly how the entire clearing process works, but I am guessing that even though Robinhood self-clears, they will still use the services of an outside clearinghouse in cases where they have an imbalance of buy to sell orders. Can anyone explain how this works? Thanks in advance.
This a farce! Why was Robinhood changed to “Clearing by Robinhood” from “Apex Clearing” (which was listed yesterday) without verifying the facts?
Hi Patrick! That is a good question – It was brought to the attention of the Investor Junkie team that this list wasn’t to date and after doing some research, we were able to determine that Robinhood is in fact self-clearing. You can find out more directly on Robinhood’s website: https://robinhood.com/us/en/support/articles/whats-clearing-by-robinhood/#:~:text=Now%2C%20Robinhood%20is%20also%20a,the%20best%20experience%20out%20there!
This comment is a farce! Why were you accusing Investor Junkie of publishing false information without verifying the facts?!
See what happens when you don’t do your research and just mindlessly repeat what you read on Reddit?
I’ve seen conflicting info on Robinhood after today’s debacle. They claim to have moved to self-clearing in 2018, but I’ve seen multiple references to a still-existing relationship with Apex. Any help?
WeBull = Apex Clearing
https://www.webull.com/story
Acorns is self-clearing (omnibus) through RBC Correspondent Services. It doesn’t clear through Apex.
Hi Jeff,
Thanks for your comment. We will research into this and change it if it’s true.
Hi, do you know where can I get a list of all clearing firms?
If you don’t think having a third party clearing firm is important, let me introduce you to Mr. Bernie Madoff.
Question…………..what firm handled Charles Schwab stock clearing in 1996 to 2000?
For people with accounts above SIPC maximum, clearing firms certainly matter. Below that line you’re really clearing with Uncle Sam.
I’m trying to find info on Apex clearing since Penson was so sketchy at the end, and Apex is the successor company. But I haven’t found much. Do you have any info?
Hi W,
Can you explain what you meant about “clearing with Uncle Sam”? To get the price?
Re: Apex.. just what I have when I reported the news:
https://investorjunkie.com/14138/penson-financial-services-apex/
I just mean that there’s no risk of clearing default while you’re under SIPC limit. Basically all clearing firms that clear whatever exchange you care about are equivalent at that point except for very minor differences in cost .
It’s when you’re above SIPC limit that you have to care about the creditworthyness of your clearing firm.
ok I agree. Though the question comes down to.. what do you do if you are over the limit. Just spread your accounts with multiple brokers (with different clearing houses of course). It always makes me concerned about that SIPC limit.
The initial routing of your trade order is handled through the clearing company, right?… And this process can affect the price of your stock. I’m wondering if there is any comparison of this. At various times I’ve noticed small dicrepencies in trying to buy a limit order on a stock, and I notice that the stock ticks below my price, but my order is still not executed… Are all the clearing firms ensuring the best price?
Hi David,
That is a good question, but don’t know the answer to this. Or are there any SEC laws concerning this? Perhaps another reader will know. What I do know that your order might get filled first by someone within the brokerage who is also trying to sell. I also know this is how some brokers from the spread, instead of going and getting the best price.
This is probably a consequence of which exchange(s) your broker routed your stock transaction to. The clearing firm determines the “menu” of where you can route, but the broker’s software makes the decision. If the price then moves to a more favorable value on another exchange, you’re out of luck. This is in the context of LIMIT orders sitting in the exchange books.
SEC rules do require that brokers route MARKET orders to the most favorable venue (referred to as national best bid/offer or NBBO) unless the customer explicitly directs otherwise. So if the exchanges do get out of whack NBBO should route some orders your way and fill you pretty fast.
If the discrepancy was small, I wouldn’t worry about it. If it was big, I’d have to see the tape to understand what happened.