LSOC

Legally segregated, operationally commingled. LSOC is the new U.S. regime for collateral posted in relation to cleared swaps (but not futures contracts). Under LSOC, FCMs and DCOs may operationally commingle customer funds, but must maintain legally segregated accounts, and are not permitted to use a non-defaulting customer’s collateral to cover losses resulting from the default of another customer.