GlossaryAdvanced
Segregated Custody
A custody arrangement where a customer's assets are held separately and distinctly, rather than pooled together with other customers' assets.
Segregated custody holds a customer's assets separately and distinctly from other customers' assets and from the custodian's own operating funds, rather than pooling everything together in a shared, commingled account.
This is the structural opposite of an omnibus (pooled) custody arrangement, and matters specifically in the event of a custodian's insolvency — segregated assets are generally more clearly identifiable as belonging to a specific customer, rather than mixed into a general pool subject to broader creditor claims.
Examples
- In a custodian's insolvency, segregated assets are generally easier to clearly identify and return to their rightful owner than assets pooled in a shared, commingled account.
- Segregated custody is the structural opposite of an omnibus arrangement, where many customers' assets are pooled together in one combined account.