# Brokerage Accounts & Networking

## Omnibus vs. Segregated Accounts

<table><thead><tr><th width="146"></th><th>Omnibus</th><th>Segregated</th></tr></thead><tbody><tr><td>Advantages</td><td><p>• Internal transactions do not incur fees, settled on a private ledger off-chain</p><p>• Simplifies account management, apply needed logic on internal private ledger</p><p>• Inherently provides privacy for customers</p><p>• Will work seamlessly with Enterprise Core Banking ledgers</p></td><td><p>• Using blockchain as a single source of truth ledger, removes the need for reconciliation</p><p>• Settlements are inherently atomic (on-chain), reduces complexity and counterparty risk</p><p>• Simplifies tracking and auditing</p></td></tr><tr><td>Disadvantages</td><td><p>• Requires extra measures to apply reconciliation on private ledger vs. blockchain nodes</p><p>• Omnibus structure on Account-based networks, e.g; Ethereum, requires an intermediate account level</p><p>• Complex protocols, e,g; Smart Contracts, may hinder reconciliation efforts</p></td><td><p>• In case most settlements are internal, requires on-chain transaction and corresponding fees</p><p>• Most public blockchain networks offer lower Transactions Per Second volume then is required by Enterprises</p><p>• Requires extra measures to mitigate customer privacy concerns</p></td></tr></tbody></table>

USE CASES

| Use Case                       | Account structure   |                  |
| ------------------------------ | ------------------- | ---------------- |
| Treasury Management            | Self Custody        | Segregated       |
| Liquidity Management           | Segregated          |                  |
| Trading & Yield                | Both                |                  |
| Building Retail Service (WaaS) | Financial (B2C)     | Sweep-to-Omnibus |
| Financial (B2B)                | Both                |                  |
| Non-financial                  | Sweep-to-Omnibus    |                  |
| Token Lifecycle Management     | Financial assets    | Segregated       |
| Non-financial assets           | Segregated          |                  |
| Clearing & Settlement Services | N/A                 |                  |
| Payments                       | Merchant settlement | Segregated       |
| Cross-border payments          | Segregated          |                  |
| Payouts                        | Segregated          |                  |
| Payins                         | Both                |                  |

FAQS

<details>

<summary>What is an omnibus account?</summary>

<mark style="color:red;">An omnibus account is a master account held on the fund’s transfer agent system that represents subaccounts of multiple investors held on the itermediary’s recordkeeping system.</mark> Some omnibus accounts may contain only a specific type of subaccount. For example, banks may open an omnibus account to aggregate all individual investor accounts that choose the same dividend reinvestment option, or an omnibus account may be opened for a single retirement plan (also known as a “plan level” omnibus account). In other circumstances, an omnibus account may represent the subaccounts of a mix of investor account types, including individual investors, retirement plans, and other pooled accounts. This type of omnibus account is referred to as a super-omnibus account.

Omnibus accounts are opened and held on the books and records of the mutual fund in the name of the intermediary. The intermediary aggregates trade activity for the subaccounts in the omnibus account and typically sends one or a few trades (representing the net of all purchases and redemptions of the subaccounts) to the fund transfer agent each day. The fund complex typically does not have any information identifying or otherwise relating trades to the beneficial owners of the subaccounts.

Omnibus accounts may be Networked or non-Networked. Anecdotally, it appears that non-Networked omnibus accounts are long-standing accounts established prior to widespread adoption of fund processing automation by the industry. Input from industry participants indicate most omnibus accounts opened and supported today are now Networked.

</details>

<details>

<summary>Who is an omnibus account for?</summary>

Intermediaries with investors. For example, Robinhood would open an omnibus wallet account with XFT to use the BITNET.&#x20;

Their <mark style="color:purple;">single omnibus account</mark> manages all the individual Robinhood brokerage accounts or "<mark style="color:red;">subaccounts</mark>" interacting with the BITNET through Robinhood's exchange.&#x20;

</details>


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