How Does Client Asset Segregation Facilitate the Porting Process?

Client asset segregation is the practice of keeping client assets separate from the assets of the clearing member. This is critical for porting because it allows the clearing house to easily identify and transfer the specific positions and collateral belonging to the clients of a defaulted member.

Without proper segregation, client assets could be commingled with the firm's own assets, making them difficult to untangle and potentially subject to the claims of the firm's other creditors. This would significantly delay or even prevent a successful porting.