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Clearance and Settlement is one of the core operational processes that underlies a securities market and determines the efficiency and effectiveness of the market at the same time reducing risks and costs. Years ago, trading, clearing and settlement were separate distinct functions. As the market advanced and in keeping abreast of technology, exchanges became automated and the need to segregate these functions declined. CSDs have now revolutionized the mode of doing business on the stock exchange and today technology is making a significant contribution to capital markets by driving the development of book-entry systems for custody, clearance and settlement of securities through a computerized production line called a Central Securities Depository. The technology too has come a long way since the early 70s when automated trading systems included, at most, the clearing function, depending on the type of system and methodology. In a few cases in North America, clearing is still independent of Exchange trading and remains a segregated pre-automation function. NASDAQ is a good example of this. At NASDAQ, Traders and Dealers use the telephone to formalize the transaction. Both sides enter the date into the ACT (Automated Confirmation Trade) system. It is the ACT which does the matching and in turn reports the matched transaction to the National Clearing Corp. (NCC).