Sub-Account

Also known as a Segregated Account.

When a bank acts on behalf of an intermediary, a sub account is opened for each of the intermediaries' clients, to hold their funds in their name. The deposited funds are not considered intermediary assets nor bank assets if a safekeeping receipt is issued by the bank.

The account can only be operated, and the funds can only be used, according to the terms of a written agreement that is given to, and approved by, the bank.