Capital market stands out as one of the fundamental indicators of the economic performance of any country. Capital market is part of a financial market which includes financial instrument trading on stock exchanges or over-the-counter. Most common instruments traded on equity market are shares and bonds with maturity of more than one year. Every securities transaction has its own course, which can be divided in three stages: investment planning, investment realization and clearing and settlement of transactions. In this paper, emphasis is placed on the third stage of securities transactions, which includes processes of clearing and settlement. The system of clearing and settlement of securities used in the Republic of Croatia, through which the post-trade process is directly being conducted, is presented. The way clearing and settlement system operates is shown, identifying all the advantages of the current system as well as its shortcomings. Furthermore, possible system improvements and optimization of the process of clearing and settlement is included in this paper. Also, the question of necessity of replacing the current clearing and settlement system with the new one, called the Central Counterparty (CCP) is discussed. The introduction of the CCP is justified by adapting to the latest European regulation and assimilating with other European depositories, as well as clearing and settlement systems. Some more developed capital markets have already implemented CCP, but it should be noted that these are all considerably more developed markets which have more potential and are more attractive and more profitable compared to Croatian market, so there is a justified need for such system. In addition, the capital market in Slovenia, Romania and Germany will also be presented, and parallels will be drawn against the Croatian capital market.