Goldman Sachs (NYSE: GS) has stopped providing clearing services for smaller institutional accounts, reports Bloomberg. The firm seems to have raised its threshold for full clearing to accounts that manage more than $5 million from $1 million. The firm handles U.S. clearing through its registered broker-dealer subsidiary, Goldman Sachs Execution & Clearing LP, known as GSEC.

"While the firm continues to clear trades for some accounts below the new limit, it's winnowing out clients that are riskier, have lower growth prospects and are more retail rather than institutional in focus," notes Bloomberg. This likely makes sense from a revenue standpoint, as the company is likely rationalizing all customers and figuring out where it gets the most bang for its buck.

Smaller accounts are going to be a lot less profitable unless they swing for the fences and hit home runs, which may not be worth the risk--especially in this regulatory climate.

The firm started to review the business about four or five months ago and has already notified a number of clients last week that they would have to find new clearing agents, says Bloomberg.

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