Sub-Account Architecture refers to a system design where a primary trading or custody account is logically partitioned into multiple distinct sub-accounts, each with independent balances, permissions, and sometimes separate trading strategies or reporting lines. In crypto, this is crucial for institutional clients managing diverse portfolios or strategies on a single platform.
Mechanism
The mechanism operates by assigning unique identifiers to each sub-account while maintaining a hierarchical link to the master account. This allows for segregated management of assets, P&L tracking, and risk attribution for different funds, clients, or trading teams, all under the umbrella of a single institutional entity’s master account. Access controls and audit trails are implemented at the sub-account level.
Methodology
The methodology facilitates granular control over capital allocation, strategy deployment, and risk management. It enables institutions to isolate the performance and risk of individual trading strategies or client mandates, simplifying reconciliation and regulatory reporting. This structure supports efficient operations for multi-strategy funds or prime brokers offering segregated accounts for institutional crypto investing.
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