It means that the client can leave his money where it is presently, as long as it is an acceptable bank, without having to move one’s capital to a different bank.  Therefore this is considered to be the number one most desirable and appealing arrangement for investor-clients.  In the old days, one bank would verify to another the balance in a customer’s account by tearing off a copy of the balance sheet and transmitting it to the other bank.  Today, of course, it’s all done electronically and instantly, but it still bears the same quaint name.

Bank instruments traders always need to issue a line of credit that reflects the amount the client has on deposit somewhere.  It is the line of credit that is used to trade instruments, not the client’s original principal.  If no administrative hold is placed on the client’s principal, the client could move the funds out of his account at any time.  That would pull the rug out from under the trader’s line of credit.  This is why an electronic verification is needed from the client’s bank.  It confirms to the trader that the principal underlying the line of credit is still in the account.  If the client were to remove his capital prematurely, before the end of the contract, he would be in violation of the contract.  That would result in all the profits stopping and the client becoming blacklisted.  This means he would never again be invited into any BIIP ever again anywhere in the world, by any BIIP provider.

A client being given the privilege of leaving his principal capital wherever it is presently is usually reserved for the $100M+ clients.  So to receive this privilege for small cap, i.e. under $100M, is rare and unusual.  By contrast, our other zero risk small cap programs presently available require that the client move his funds to a designated bank.  ($100M+ clients can almost always have tear sheet programs if desired.)