"Authorized firm", "investment firm" and "firm" means a firm whose investment business activities fall under the authority of a jurisdiction's regulator of investment firms. It includes banks as well as traditional investment firms in jurisdictions where some or all of a bank's investment business is regulated through the relevant investment services law of the jurisdiction.

"Customers" and "clients" mean persons or other entities on whose behalf authorised firms hold assets in connection with investment services business. The precise definition of customer or client varies from one jurisdiction to another. This paper is not directly concerned with the scope of the definition of client or customer as much as the consequences of being one.

2.The "client assets" with which this paper is concerned fall into three major categories:

- client money, which is money owed to or held on behalf of clients by an investment firm, and may include income relating to an investment such as dividends or interest;

- client securities which are often represented by a certificate, but are increasingly held in a "dematerialised" or book entry form; and

- client positions which are contractual rights arising from transactions entered into by an investment firm on behalf of its clients, including mark to market accruals arising from the change in value of futures and options positions.

These three classes of asset are collectively referred to as "client assets".