Which term describes an intermediary that handles transactions between buyers and sellers of securities?

The term that best describes an intermediary that facilitates transactions between buyers and sellers of securities is "Clearing Agency." A clearing agency acts as a middleman to ensure that transactions are processed smoothly and efficiently, often taking on the responsibility of settling trades, transferring securities, and ensuring that all parties are credited with the proper amounts.

Clearing agencies play a critical role in the securities market by managing the risks associated with transactions. They help standardize processes and reduce counterparty risk by assuring that the trade is executed and settled. This function is essential for maintaining trust and efficiency in financial markets.

In contrast, while other choices like transfer agents, market makers, and custodians are important roles in the securities industry, they serve different functions. Transfer agents manage and record the ownership of securities, market makers provide liquidity in the market by actively quoting prices, and custodians safeguard financial assets, but none of these roles directly handle the transaction clearing process in the same way a clearing agency does.