So due to several factors too long to mention I can only use a single broker where I leave. There is a paragraph in the TOS that talks about an omnibus account:
” I/We hereby expressly consent to the IF entering into arrangements for Securities Financing Transactions in respect of Financial Instruments held on behalf of me/us in an omnibus account maintained by a third party or otherwise use any Financial Instruments held in such an account for its own account or the account of any other person. “
The broker rep told me that most brokers even the big ones are using omnibus accounts to hold stocks and they have a third-party custodian JPM and and MS.
My question: how safe are my funds if this broker goes down you think? I cannot assess this possibility and my accountant can't offer help. Is the omnibus a common practise and if market turns south and there are closures my stocks are safe?
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