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Client Money Reconciliation

The recurring check that a broker's segregated accounts hold what clients are owed — the machinery behind the word "segregated".

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A client money reconciliation is the check a broker runs — in the stricter regimes, on every business day — comparing what it should be holding for clients with what is actually in the segregated bank accounts, and making up any shortfall from its own funds before the day is out. It is the machinery that turns "client funds are held in segregated accounts" from a sentence into a fact. Segregation without a regular reconciliation, an external audit and a duty to report breaches is a promise nobody is testing. For a client the check is indirect but not impossible: whether the licence carries client-money rules of that kind, whether the firm's accounts are audited and published, and whether the legal entity named in your client agreement is the one holding that licence.

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Guide

How a Broker Holds Your Money

Segregated accounts, regulatory capital and compensation schemes are three different protections that get described in one sentence. What each covers, what it does not, and how to check which apply to you.

Read the guide