Client Fund Custodian

The client fund custodian is the institution that actually holds client money. Segregation establishes that the money is separate from the broker's own, but not where or with whom it sits: in practice deposits may be held at a credit institution, at an electronic money or payment institution, or spread across several of them in different countries, and the arrangement is disclosed in the client agreement rather than on the marketing pages. The distinction matters when something goes wrong. Deposit-guarantee schemes protect the depositors of banks and not the clients of payment institutions, so where the money sits determines whether a failure of the holding institution is covered at all — a separate question from whether the broker's own failure is covered by an investor compensation scheme. The jurisdiction of the holding institution decides whose insolvency law applies and how quickly funds can be returned. The questions worth asking are which institutions hold client money, in which countries, and whether balances are pooled or held per client.