Omnibus account

Omnibus account,

Definition of Omnibus account:

  1. An omnibus account allows for managed trades of more than one person, and allows for anonymity of the persons in the account. Omnibus accounts are used by futures commission merchants. Transactions within the account are carried out in the name of the broker, protecting the individual identities of the two or more people invested in the omnibus account. The broker managing the omnibus account typically has the ability to execute trades on behalf of investors with funds inside the omnibus account. Trades are made in the name of the broker, although trade confirmations and statements are provided to customers within the account. .

  2. An account carried by a Futures Commission Merchant (FCM) that combines the transactions of two or more individuals and is held in the name of another FCM. Compare to Fully Disclosed Account.

  3. Omnibus accounts refer to accounts that hold more than one item (omni- meaning 'many' and -bus meaning 'business'). A minimum of two individuals are required to create an omnibus account. All transactions occurring within an omnibus account will appear under the name of the associated broker, leaving the details of individual investors private.

How to use Omnibus account in a sentence?

  1. Omnibus accounts allow more efficient transactions to take place, since the manager can act swiftly when market conditions call for it.
  2. Also, the manager's compensation is often tied to the performance of the omnibus account, adding incentive to have it perform well.
  3. An omnibus account allows for managed trades of more than one person, and allows for anonymity of the persons in the account.
  4. For investors that want privacy, an omnibus account is beneficial.

Meaning of Omnibus account & Omnibus account Definition