OmniSub

What is OmniSub and how is it legally structured?

OmniSub is Alpaca’s omnibus account model that features internal sub-accounting. The structure is an omnibus brokerage account held by the partner at Alpaca Securities LLC. The sub-accounting layer is a technology solution provided by Alpaca DB and the sub-accounts are not considered fully disclosed broker accounts to Alpaca Securities LLC. Alpaca DB provides the technology layer to power your front-end customer experience while the only brokerage account opened will be the omni brokerage account.

A Partner, such as a broker or fintech, holds this single legal omnibus account, while all individual customer balances and activities are tracked as distinct "sub-accounts" within Alpaca DB systems for operational and reporting purposes.

How are accounts structured in the OmniSub model?

The model consists of three key components:

Omnibus Account: This is the single, legal brokerage account that the partner establishes and owns at Alpaca Securities LLC. All aggregate activity from the sub-accounts rolls up into this account.
Sub-accounts: These are not brokerage accounts of Alpaca Securities LLC, but are internal, technology-based records for tracking each end-customer's positions and activities. They are managed by the partner via API.

Can I trade directly from the omnibus account?

No, direct trading is disabled at the omnibus account level. All trading activities must originate from and be executed exclusively through the individual sub-accounts or the designated Default Account.

Will I be able to see sub-accounts in Brokerdash?

Yes, partners have visibility into their individual sub-accounts within Brokerdash, our partner dashboard. This view also includes two system accounts: the default account (for holding residuals) and a control account (for operational adjustments).

Who is responsible for KYC/CIP and AML for the end-customers?

The partner is solely responsible for all end-customer compliance. This includes:

KYC/CIP: The partner must conduct their own comprehensive Know Your Customer (KYC) and Customer Identification Program (CIP) procedures for all end-customers.
AML: The partner is primarily responsible for end-customer Anti-Money Laundering (AML) monitoring based on their own policies. While end-customer PII is not shared, the granular nature of sub-accounts gives Alpaca enhanced internal visibility to monitor transactions.
Your AML program will be reviewed during onboarding as part of due diligence.

How is tax reporting managed?

Alpaca's tax reporting responsibility is limited to the omnibus account level only.

The partner is fully responsible for all tax reporting obligations for their individual end-customers.

What funding methods are supported and how do they work?

All funding activities (deposits, withdrawals) are performed centrally at the omnibus account level. OmniSub supports two main models:

Pre-funding (Aggregated): The partner deposits funds into the omnibus account in advance. Buying power checks are enforced, and sub-accounts can only trade up to their allocated amount.
Post-Trade Net Settlement (No Buying Power Checks): Trades can be executed without pre-funding up to a pre-set limit. At the end of the day, all trades are netted, and the partner settles the final net debit or credit balance. This model significantly optimizes capital efficiency.

How are trades executed?

Trades are placed at the sub-account level via API. The system then automatically mirrors these trades into the omnibus account to facilitate settlement, clearing, and regulatory reporting.

How are corporate actions handled?

Mandatory Corporate Actions: Events like dividends, stock splits, and mergers are processed simultaneously at both the sub-account and the omnibus account levels to ensure consistency. Any rounding residuals are booked to a designated control account.

Why might a sub-account be blocked from trading?

This is typically due to a pending corporate action. To ensure positions and balances are accurate, Alpaca will set trading_blocked = true on a sub-account if corporate action processing is not complete before market open. Partners can monitor this status via the API.

Who provides official statements and trade confirmations to the end customer?

The Partner is always responsible for providing official statements and confirms to end clients. Alpaca provides the necessary JSON data for sub-accounts and official statements for the omnibus account to facilitate this.

What is the process for error handling and trade corrections?

Alpaca Securities LLC’s Responsibility: Venue-related trade corrections (e.g., from exchange errors) and Client-originated errors (e.g., incorrect order entry) are handled by Alpaca Securities LLC.
Processing: All trade corrections and busts are processed at the sub-account level and automatically propagate to the omnibus account to maintain reconciliation. The partner is responsible for addressing any resulting debit balances in a sub-account.

How are ACATS handled?

Incoming ACATS: Asset transfers are allocated to the specified sub-account, and the partner is responsible for validating the allocation.
Outgoing ACATS: The partner has a 24-hour validation window to approve an outgoing transfer request before Alpaca processes it.

Do I need to handle my own CAT (Consolidated Audit Trail) reporting?

Alpaca Securities LLC handles CAT reporting at the omnibus account level.

Can I migrate my existing Fully-Disclosed accounts to an OmniSub model?

It’s important to consider what’s important for your business as each business is unique. Alpaca will review your request and make a determination. Alpaca has a semi-automated process for this migration.

Can my sub-accounts operate in a different currency than the omnibus account?

No. All sub-accounts must use the same base currency as the parent omnibus account.

How do I create a sub-account via the API?

A partner can create a sub-account by calling the Broker API.

Endpoint: POST /v1/accounts

Request Body:
{ "account_type": "omnibus_sub", "primary_account_holder_id": "<the owner id of your omni account>" }

The Omni-Sub product is offered by AlpacaDB as a technology service for sub-accounting related to omnibus clearing services. Approval for this technology service is subject to Alpaca Securities due diligence review.

The content of this document is for general information only and is believed to be accurate as of posting date but may be subject to change. Alpaca does not provide investment, tax, or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein.

Securities brokerage services are provided by Alpaca Securities LLC ("Alpaca Securities"), member FINRA/SIPC, a wholly-owned subsidiary of AlpacaDB, Inc. Technology and services are offered by AlpacaDB, Inc.

This is not an offer, solicitation of an offer, or advice to buy or sell securities or open a brokerage account in any jurisdiction where Alpaca Securities is not registered or licensed, as applicable.