Custody and clearing are not the same signature as the brand

platformPublished 20 October 20261 min readmulti asset

Key points

• Introducing, execution, clearing and custody can be split.
• Client-asset rules are about segregation and records. They are not a promise of profit.
• A group chart is not a substitute for the names on the agreement.

What is going on

In listed markets a clearing member stands between a client’s broker and the clearing house. Some firms are that member. Others introduce the account to one. Custody of securities may sit with the broker or with a separate custodian. Cash may be held under client-money rules that depend on the country and the entity. The SEC, FINRA, the FCA and Investor.gov publish the public explanations of those roles. They do not fill in a brand’s current org chart.

Why it matters

If the introducing firm fails, the question is which entity holds the positions and the cash. If the product is bilateral, the provider may be the counterparty, and client-asset language written for listed securities may not apply to that contract.

What to watch

Find the legal names for the contracting party, the custodian and, where relevant, the clearing firm. Note which products are inside the client-asset description and which are outside it.

Risks

A compensation scheme, where one exists, has a limit and a list of excluded claims. Segregation can fail in practice. This note is not a check of a named firm’s current custody.