Custody, Safekeeping, and Customer Asset Protection

What this video covers

• Why safekeeping (the locked vault) and segregation (the separate compartment) are two distinct protections and what each defends against
• What custody means in terms of physical possession or holding responsibility, and how recognized control differs as a legal status tied to specific locations and conditions
• The three eligible locations for recognized control: clearing corporations under central handling, omnibus credit accounts at other broker-dealers complying with Regulation T, and securities in transit between firm offices
• Why delivery to the broker-dealer at a clearing corporation must require no payment of money or value, and why the firm's books must identify entitled customers by exact quantities
• Why an omnibus credit account must be kept free of any charge, lien, or claim in favor of the carrying broker-dealer
• How street name registration works: the broker-dealer or nominee is the registered holder, the customer remains the beneficial owner with the economic interest
• The exact sequence and timing of written disclosures before first borrow, written authorization before lending eligible margin securities, and written agreement at or before borrowing fully paid or excess margin securities