Just out of curiosity,
Municipal bonds are settled in the clearing house along with the corporate securities, correct?
Another question:
Are corporate debts the same thing as corporate securities? Same goes for Municipal debts, right?
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Hi @FoxMcCloud - yes, you’re right! Corporate and municipal securities settle through Clearing House, while US government securities settle through Federal Funds.
The term ‘security’ refers to an investment and is a general term. Corporate debt is a type of corporate security, but they’re not the same thing. Example of corporate securities include common stocks, preferred stocks, bonds, commercial paper, etc. Bonds and commercial paper are examples of corporate debt securities. Stocks are corporate securities, but are not debt securities. Bottom line - debt is a type of security.
Municipalities do not issue stock, so it’s safe to assume these issuers are primarily issuing debt securities.
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made sense! thank you.
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