What is approaching?

In financial circles, commingling is a practice of mixing securities of customers with the account of securities that are the property of the bank, real estate agencies or brokerage. The comparative process makes it difficult to determine which assets are the client's property and which securities belong to the entity managing client assets. In most areas of the financial world, commingling is considered unethical and violation of trust. Depending on jurisdiction, this practice may also be illegal.

Communication practice should not be confused with the practice of placing customers' securities on a joint trust account. Combination of assets of two or more customers in common trust is a strategy that is often used to maximize the return on investment on behalf of the participating clients. Within this scenario, there is no doubt about the amount of assets that every client contributed, so the process of assigning profits or losses is simple.

On the other hand, unethical compositions can often blur lines between the service provider and the client to the extent that it is not possible to determine how much profit or loss should be assigned to each side. In the worst examples of Commingling, the management entity will divide all losses between clients involved in the ComMingled account, but do not necessarily assign a fair part of the profit realized to customers. In situations where the courts interfere with the situations of this nature, it is common for the authorities to determine that any profit will be assigned to clients.

Many financial entities impose strict fines or worse if evidence of acceptance occurs. For example, a real estate broker may lose its operating license if it is determined to be involved in the activity. The brokerage pages can be excluded from trading on certain markets and banks can still face sanctions. Generally, Commingling is a practice that every renowned investment entity decides to avoid.