Integration models

Whether you are an RIA or a broker-dealer, DriveWealth will integrate with your product to provide execution, clearing and settlement. There are two ways to integrate with DriveWealth: on a fully disclosed or omnibus basis.

The vast majority of DriveWealth’s relationships are fully disclosed. This type of integration will allow you to fully leverage our clearing platform and features - essentially, we’ll handle a greater workload for you.

If your business is a registered broker-dealer, you also have the option of integrating with DriveWealth on an omnibus basis. This relationship will require you to have the infrastructure internally to manage all customer-facing services we would usually provide in a fully-disclosed relationship.

Fully Disclosed

In a fully disclosed relationship, all of your customer accounts will be created and exist in the DriveWealth system. DriveWealth will service all aspects of your customer accounts (except direct customer service and customer communications). RIA’s are required to integrate with DriveWealth on a fully disclosed basis.

In this type of relationship, DriveWealth will be responsible for:

  • Creating accounts for customers on DriveWealth’s clearing platform
  • Accepting customer funds
  • Accepting and executing customer orders sent by introducing partners
  • Providing clearance and settlement for customer transactions
  • Providing customer reporting in the form of trading confirmations and monthly statements, as well as tax reporting services and forms
  • Processing all financial transactions in customer accounts, including the handling of corporate action events
  • Sending corporate communications such as proxies and prospectuses

Omnibus

If you choose to enter into an omnibus relationship with DriveWealth, we will create one account for your company in our system. All of your customers’ transactions will be executed through this account and legally, your broker-dealer will be the only customer of DriveWealth in this relationship.

To operate in this manner, your company must:

  • Have the internal resources and systems to provide all services listed in the “Fully Disclosed” section above directly to your customers
  • Be a qualified intermediary (QI) with the United States Internal Revenue Service (IRS).
  • Comply with any local regulatory requirements

🚧

Fully Disclosed vs. Omnibus Matrix

Below describes how specific regulatory responsibilities are allocated between your business and DriveWealth in a fully disclosed relationship vs an omnibus relationship.

Regulatory ItemsFully-DisclosedOmnibus
AML and other Surveillance
DW and Partner both have regulatory responsibility to monitor all customer activity

DW can create customized reports to assist the introducing partner in executing its surveillance and monitoring responsibilities
Partner is responsible for all surveillance at the customer level

DW can provide reports for the omnibus account but will be unable to report by customer
Books and RecordsDW responsible for creation and maintenance of records at the customer levelPartner responsible for creation and maintenance of all books and records related to underlying accounts (e.g. corporate actions, see below)
•DW responsible for preparing at the omnibus account level
Corporate ActionsDW processes corporate actions for each customer accountPartner is responsible for monitoring and processing the impact of any corporate actions on the underlying customer accounts

DW only maintains at the omnibus level
Customer Identification ProgramDW is always responsible. Reliance may be available in the case of US registered counterpartiesPartner is responsible
DisclosuresDW can facilitate and/or provide disclosures to customers where applicablePartner is responsible for all applicable disclosures to underlying customers

DW only makes disclosures to the omnibus account level
Extension of Credit (Margin)Can be available at the customer account levelCan be available at the omnibus account (partner) level
Financial Responsibility and Account ProtectionEach customer account protected up to $500k under SIPCOmnibus account only protected up to $500k under SIPC
Money Movement/ Account fundingDW can work with different account funding mechanisms based on the specific offering and regulatory licensing of counterpartyDW only knows the omnibus partner

Partner is responsible for collection of all customer funds and remittance of such funds to DW

DW will not accept individual retail wires
Opening and Approval of AccountsDW must approve the accounts that are maintained on its books

Control of onboarding workflow depends on if there is a reliance provision
DW only knows the omnibus account and not the underlying customers

Partner controls the onboarding workflow
OrdersDW is responsible for acceptance of orders which are successfully transmittedPartner is responsible for the acceptance of all customer orders

DW only sees the consolidated order (could be for one or multiple underlying customers)
StatementsDW responsible for preparing at the customer levelPartner responsible for preparing at the customer level

DW responsible for preparing at the omnibus account level
Tax ReportingDW conducts all tax preparation and reporting related to customer accountsDW prepares at the omnibus account level, partner is responsible for all tax preparation and reporting as it relates to underlying accounts
Trade ConfirmationsDW responsible for preparing at the customer levelPartner responsible for preparing at the customer level

DW responsible for preparing at the omnibus account level