To Shield Themselves, Financial Institutions Increasingly Ask for More from Omnibus Clients

By Brian Monroe

U.S. financial institutions are taking a closer look at accounts held for stock brokers managing money on behalf of multiple parties in the wake of governmental warnings and sanctions-related settlements. In March, Office of Foreign Assets Control (OFAC) Director Adam Szubin warned bankers that the opacity of so-called omnibus accounts could disguise the role of blacklisted companies and individuals holding money in U.S. accounts. In some instances, the accounts involve thousands of investors, many of whom can be unknown to the U.S. institution ultimately serving them, he said. The risks associated with the accounts have propelled securities regulators to more...