Clearing firms like Robinhood Clearing do a number of tasks, including the following.

• Clearing: This is how brokerages make sure that the price and number of shares you expect to give or receive when you place a trade matches the price and number of shares the other person expects to give or receive. Most of this is automated, but every once in a while the numbers don’t quite match, and a human from each clearing firm will step in to iron out the details. This all happens behind the scenes, so you don’t have to worry about it.

• Settlement: After a trade clears, and both the buyer and seller agree on which assets need to exchange hands, the clearing firm oversees the transaction and makes sure each side fulfills their obligation. Again, this all happens on your behalf by the clearing firm.

• Custody: When the cash or shares settle from a trade, someone needs to account for where the assets go by keeping extremely detailed records. Clearing firms have specific oversight from regulators to enable this. There are safeguards that make sure your asset records exist no matter what. We’ve got your back.

• ACATS in and out: You can transfer assets in or out of your account through the Automated Customer Account Transfer Service (ACATS).

• Account statements: Provides account statements, trade confirmations, and tax documents relating to your account.