A CMTA is an agreement between different brokers to allow and settle the transactions of all the brokers involved through a single broker. Since an investor can have business relationships with multiple brokers, he or she can initiate transactions with several of them at the same time. But when it`s time to settle these transactions, they can settle for a single broker. Without the clearing members` trade agreement, the investor would transact with different brokers and the deals would be cleared with multiple brokers. This can be cumbersome and time-consuming when it comes to closing positions. With a CMTA, a broker will submit all transactions to the clearing house for settlement. A trading agreement between clearing members is a document that establishes a working relationship between an investor and a brokerage. The agreement does not prevent the investor from using several brokerage houses to carry out derivative transactions. However, the document allows the investor to consolidate these transactions with a broker with the aim of clearing the transactions. However, when the time comes to actually execute the orders, the clearing member trading agreement offers the investor the opportunity to consolidate all orders through a broker. It can also be beneficial for investors, as consolidation makes it possible to monitor all orders by consulting a central source instead of having to deal with multiple brokerage firms. In addition, consolidating all orders under the terms of a trading contract means less time and money for clearing members for fees and commissions paid for order execution.
The terms included in the typical trading agreement for clearing members allow an investor to explore investment options through a number of different brokers. The use of multiple brokers can occur due to several factors. A particular broker may have expertise in a particular sector of a market, while another broker may be considered more proficient with the options or shares associated with another market. For an investor looking to create a diversified equity portfolio, leveraging the expertise of various brokers can be an effective strategy. Such an agreement has advantages for investors, as they can monitor all orders through a central source instead of having to view the records of several different brokerage firms. In addition, an optimized clearing system reduces the cost of commissions and fees and saves time. A trading agreement with a clearing member (CMTA) is an agreement whereby an investor can enter into derivatives transactions with a limited number of different brokers, but can consolidate those transactions later at the end of the trading day with a single broker for clearing. To meet the conditions contained in a trading agreement with a clearing member (AMTC), transactions must be settled through the Option Clearing Company. The OCC is responsible for managing the clearing process for various types of options transactions carried out on a number of exchanges. At the same time, the OCC also regulates the registration of new options in the various markets.
All OCC activities are conducted in accordance with regulations issued by the Securities and Exchange Commission. First, OCC`s clearing member („AMTC“) trading process allows a clearing member to trade in securities options (i.e., The executing clearing member), trade directly through OCC to another clearing member for release and settlement (i.e. The supporting clearing member).  Under the CMTA procedure, an executing clearing member may send options transactions directly to the collective accounts of a support clearing member at OCC for settlement and settlement without providing information identifying the specific accounts to which trading should be allocated. Second, in the abandonment process, a broker can execute a trade on an exchange and then assign that trade to a clearing member`s omnibus account. Specifically, for client transactions, a broker who is not a clearing member of the OCC may execute a client`s transaction and then „hand over“ the transaction to the client`s clearing broker, who must be a clearing member of the OCC without identifying the client for whom the transaction was executed. .