Practice and liability
Trust account
A separate account holding client money, never the brokerage’s own funds
Earnest money, rent collected for owners and security deposits go here. The account is separate from operating funds by law, and records must show at all times whose money is in it and how much.
How the exam asks about it
The two offenses to name on sight: commingling, which is mixing client funds with the firm’s, and conversion, which is using them. Both are among the fastest routes to revocation.
Related terms
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