Segregated account refers to a special account opened by a financial institution to deposit customer's margin with the bank separately. In order to ensure the safety of customers' funds, the segregated account system requires financial institutions to separate customers' margin from their own accounts and to deposit reserves in the segregated account. The reserves are the own funds of financial institutions, and the amount is directly proportional to the amount of customers' margin.
The segregated account system also includes the following:
① All customers' funds must be opened and set up separately.
② Any customer funds deposited through banks, trust companies, clearing companies or brokers must clearly indicate that these are closed customer funds.
③ Under no circumstances shall any clearing company or broker use any funds in a client's closed account other than for the purpose of the client's own purchase, guarantee, transaction, margin, fund transfer and settlement.
④ No broker, clearing house or depository other than the client has the right to hold or use the client's funds in the name of others.
⑤ The profits from customer transactions are classified into the customer's own closed account.