Posted in Finance, Accounting and Economics Terms, Total Reads: 456
Definition: Active Box
It is a place in a brokerage firm where securities are stored. These securities are generally considered as the collateral for the margin positions of the customers. The collaterals are used to obtain broker loans.
These broker loans are the money given by the banks to the brokers and investors. The money can be utilized to finance the operational activities of the broker and the underwriting of the corporate securities.
Margin accounts of the customers are financed with broker loans. These margin accounts along with the broker loans enable the investors to buy huge amount of securities. Active box is used to keep the stock and the bond certificates until the loan amount is paid back. Bond certificate gives the right to the owner to collect the debt as mentioned in the document.