Ethics: general question re soft dollar policies and client brokerage question, something, difference

dvilayphet

General question: why is there a stipulation as to what a firm can do with the cash it receives from client brokerage? Isn't the money fungible, i.e. what difference does it make whether they make general firm operating expense purchases from a "client brokerage" account vs. their firm's cash balance? Once client brokerage is received by a firm, isn't that cash the firm's property? I think I am missing something. Is the concept that if the firm were theoretically to liquidate, or if the client were to stop doing business with the firm, then the "client brokerage" would revert to the client?