A requirement that customer assets be held separately from a firm’s own operating funds and identifiable as customers’.
Why it matters
It is the provision that most determines what customers recover from a failed custodian. Commingled assets generally form part of the estate; segregated assets have a materially different status. Japan and Switzerland both address it explicitly — see Japan and Switzerland.
Not advice. Definitions are for understanding, not instruction. Nothing here is financial, legal, tax or security advice.