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Why cannot a clearing member hold his personal holdings in his clearing member account?

April 26, 2017account clearing hold holdings

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Why cannot a clearing member hold his personal holdings in his clearing member account?

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Ans A broker may deal in the depository system as a clearing member only through a special account, known as the Clearing Member account. This account can be used only for clearing purposes and not for holding his own securities in it. As this is a transitory account, the securities held in this account are not eligible for corporate actions. Therefore, the broker will have to open a separate beneficiary owner account to hold his investments.