Omnibus Clearing Agreement

There are essentially two types of compensation agreements, namely .05 communication to customers. For the purposes of paragraph (d) of this rule, it is not necessary to notify the customer of an amendment to any of the parties to the transportation contract if, in accordance with current FINRA rules and federal securities laws, the accounts of these customers are transferred in accordance with the following conditions: (a) ACATS with an approved transfer instruction form (TIF); or b) a procedure outside ACATS in which customers are notified by another mechanism, such as positive or negative response. An omnibus account is an account used by an introductory broker to execute and delete all trades from its clients via an account with the countervailing broker. This type of compensation agreement is the exception to traditional all-public compensation agreements. Earlier, when two clearing brokers have to remove the trade means manually to reconcile the trades between two parties and settle the confirmation, then trading by sharing certificates (shares) and cash. For example, if the buying broker X ABC Company purchased common shares for a client by purchasing Y from the broker, X would charge Y the transaction directly. A confirmation note would be generated by each broker for confirmation of the trading and then the brokers will confirm their clients. Then broker X will send a person to site Y to give money and resume share delivery so that Broker X can return the certificate to the customer. Then the clearing world slowly thought of clearing process because brokers have multiple trades for the same security for different customers who move them into the net base approach once a day, i.e.) X would aggregate all transactions with Y as consideration, determine the total net amount purchased and sold in a security, and the net amount for all securities are received or paid. An omnibus account is normally monitored by a futures manager. The futures manager uses the funds in the account to enter into trades on behalf of participating individual investors. This method is similar to that of an investor who leaves shares on behalf of a broker, so that the broker retains the majority of the responsibility, while allowing to take quick actions if necessary.