Interest on Consolidated Customer Account: Country References
Below are references from regulations and business practices of different countries, suggesting that
the interest earnings from the balance of consolidated customer account can be retained by the
brokerages.
USA
The business practice is that brokerages typically retain interest unless specified in client
agreements.
Please refer to Schwab’s agreements below which states that Schwab retains interests from
aggregate balance cash in brokerage accounts. https://www.schwab.com/legal/schwab-one-account-
agreement
United Kingdom
The FCA’s CASS rules require client money to be held in segregated accounts, but brokers are
permitted to retain interest earned on client money accounts. CASS 7.11.32R allows firms to retain
interest as part of their business model. This applies to consolidated client money accounts where
free float is pooled.
IG Group, a leading stock broker in UK explicitly states that no interest is paid to clients on
uninvested cash held in pooled client money accounts (IG Group’s Client Agreement no. 18(4) Client
Money)
https://www.ig.com/usermanagement/customeragreements?igCompany=igintl&agreementType=cu
stomer_agreement&productCode=IGCFD&locale=en_GB
Malaysia
The business practice of Malaysia reiterates that brokerage retains the interest income. It is
exemplified by the agreement of iFAST Capital in Malaysia. Page 06, Clause 3.14. Link:
https://www.fsmone.com.my/articleFiles/terms_con.pdf
Singapore
The business practice is that the brokerage retains the interest income, as suggested by the General
Trading Agreement of DBS VICKERS SECURITIES (SINGAPORE) PTE LTD, a Subsidiary of DBS Bank.
Page 06, Clause A4 (4.7). https://www.dbsvickers.com/iwov-resources/media/vickers-pdf/GTA.pdf
Similar tone is reiterated by Phillip Securities: MNC for financial service provider: Part A (4. Interest
Waiver / Substitution): https://wm.phillip.com.sg/Content/PSPL_TC.pdf
HongKong
Securities and Futures (Client Money) Rules (Cap. 571I), Section 6, mandates segregation of
customers’ money from company account but not interest payment. The brokerages can retain
interest amount as the regulation suggest.
https://www.elegislation.gov.hk/hk/cap571I?xpid=ID_1438403475581_003
Futu Securities International (Hong Kong) Limited explicitly mentions it in the client agreement.
https://www.futuhk.com/en/about/agreement#06
Vietnam
The business practice is that the brokerage retains the interest income. State Securities Commission
requires segregation of clients fund from company’s own money but there is no specific guidance
stating that the interest needs to be allocated to the customers.
The legal framework governing the management of client funds by brokerages is primarily outlined
in the Law on Securities No. 54/2019/QH14, supplemented by specific regulations such as Circular
No. 210/2012/TT-BTC issued by the Ministry of Finance.
The interest from consolidated customer account has become a substantial source of alternative
revenue for brokerages like TCBS which earned over VNĐ1.6 trillion (US$6.4 million) from interest in
2023, making up around 30% of its operating revenue. DNSE, another brokerage, earns 40% of its
operating revenue from such sources. https://vietnamnews.vn/economy/1653597/zero-fee-tactic-
empowers-securities-firms.html
