I think there is something of term-of-art here. "Clearing brokers" (like Goldman) vet the clients who send transactions to the exchange. If the client default

I think there is something of term-of-art here. "Clearing brokers" (like Goldman) vet the clients who send transactions to the exchange. If the client defaults on a trade, Goldman is likely liable to the clearing house for the default amount, so it is in their interest to clear only those clients with sufficient collateral to provide margin. Note that a clearing broker is different from a clearing house. The clearing house serves as a back end settlement layer to an exchange, which serves as a front-end matching engine. https://www.investopedia.com/terms/c/clearingbroker.asp https://www.investopedia.com/terms/c/clearingbroker.asp Edit: There must be a bona fide finance guy here on HN to answer this knowledgably?