Brokerage firms and fintech innovators face a difficult choice when building a financial platform. They can choose an omnibus account structure, which gives them flexibility but comes with significant financial, technical, and operational complexity. Or go with a fully disclosed account structure, which is faster and simpler to launch but means less flexibility.
Building an omnibus structure is a high-stakes engineering challenge. You're not just building a simple trade ticket. Instead, you're creating an operational core, a complex front and middle office for account hierarchies, compliance checks, margin logic, and real-time reconciliation. All of this must then be seamlessly integrated with your back office clearing systems with little room for error because one wrong assumption can lead to failed trades, inaccurate balances, or compliance issues.
This is why many firms choose the easier path and opt for a fully disclosed structure. For those who do build an omnibus model, this operational layer becomes one of the most challenging, expensive, and business-critical parts of the entire platform.
That’s why we’re thrilled to announce the launch of our omnibus sub-accounting ledger, or OmniSub*, so that you don’t have to make the difficult decision.
What is Alpaca’s OmniSub?
OmniSub is a technology layer on top of your omnibus account providing a reliable operational framework powering your middle and front office to manage complexity. The Alpaca OmniSub structure consists of two parts. The first is an omnibus account offered by Alpaca Securities LLC. The second is the technology offering, OmniSub, offered by AlpacaDB, Inc.
The omni account includes the pooled assets of all your end-users, just like a traditional omnibus model. The OmniSub technology is then built on top, providing an API-first sub-accounting layer and gives real-time visibility and control over every individual sub-account.
With OmniSub, you gain the operational benefits and customer privacy of an omnibus account, while we deliver the detailed, transaction-related data and functionality typically associated with a fully disclosed account.
OmniSub with Alpaca: How It Works and How It's Different
To better understand the OmniSub solution, let’s compare it to fully disclosed and omnibus, the two most common account models.
Potential Benefits of OmniSub Accounts
We've engineered OmniSub to help with time-consuming aspects of brokerage operations, like individual position management, reconciliation, corporate actions, and trade matching. We want to help you focus on growing your business instead of managing complex bookkeeping for individual sub-accounts, reducing your administrative burden.
Position Management
With our additional technology layer of sub-accounting, you don’t have to build a complex ledger system yourself. You can take advantage of OmniSub’s sub-accounting layer, providing a real-time view into sub-account transactions and positions at any time.
Reconciliation
When working with an omnibus account, reconciliation can be a complex process. As the responsibility is on the partner, they must continually reconcile internal records, detailing each customer's specific holdings and transactions, with the single, omnibus account. This requires sophisticated internal systems and processes to manage and resolve any discrepancies or inaccurate reporting.
OmniSub, like fully disclosed, provides a simplified reconciliation process because it provides insight into each individual sub-account. While the responsibility is still on the partner to ensure accuracy, it empowers them to more easily verify which transactions and accounts are causing discrepancies and require reconciliation.
Corporate Actions
Similarly, when on an omnibus model, corporate actions may cause account discrepancies issues. For example, if a dividend is paid, it is processed at bulk at the omnibus level. The responsibility is on the partner to process these transactions for each sub-account which is a tedious process that can lead to data errors or delays in distribution.
With the OmniSub model, we process the corporate action at the sub-account level. This leads to a more simplified approach, empowering the partner to accurately distribute these actions to their customers.
Trade Matching
Trade matching is a critical process of ensuring that the details of a securities trade are identical and agreed upon by all parties involved. In an omnibus account, your bookkeeping system must create a scalable, intelligent method to match underlying customer trade data to aggregate omnibus records. With OmniSub, the potential guesswork is removed since the trade activities are captured in the sub-ledger, which makes accurate, automated allocation and matching much easier.
Ready to Build? Let's Discuss Your Brokerage Account Options
We are ready to service your needs. Whether it’s the hands-off approach of fully disclosed, the independence of omnibus, or the OmniSub feature that combines their use cases, you can pick the solution that aligns most with your business’s needs.
For current partners, please reach out to your Customer Success Manager or our global support team at [email protected].
For new partners who are looking to utilize our Broker API, please reach out to [email protected] or fill out the form below.
Want to learn more? Read our docs and FAQs for OmniSub.
Contact Alpaca
About Alpaca
Alpaca is a US-headquartered self-clearing broker-dealer and brokerage infrastructure for stocks, ETFs, options, crypto, fixed income, and 24/5 trading – raising over USD170 million in funding. Alpaca is backed by top-tier investors globally, including Portage Ventures, Spark Capital, Tribe Capital, Social Leverage, Horizons Ventures, Unbound, SBI Group, Derayah Financial, Elefund, and Y Combinator.
*The OmniSub 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.
Orders placed outside regular trading hours (9:30 a.m. – 4:00 p.m. ET) may experience price fluctuations, partial executions, or delays due to lower liquidity and higher volatility. Orders not designated for extended hours execution will be queued for the next trading session. Additionally, fractional trading may be limited during extended hours. For more details, please review Alpaca Extended Hours & Overnight Trading Risk Disclosure.
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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.
Cryptocurrency services are made available by Alpaca Crypto LLC ("Alpaca Crypto"), a FinCEN registered money services business (NMLS # 2160858), and a wholly-owned subsidiary of AlpacaDB, Inc. Alpaca Crypto is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC. Please see the Disclosure Library for more information.
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