What is the primary responsibility of carrying firms regarding customer funds and securities?

The primary responsibility of carrying firms regarding customer funds and securities is to ensure that these assets are segregated from the firm’s own capital. This requirement is grounded in the regulatory framework designed to protect investors. By keeping customer assets separate, firms help safeguard client funds and securities, thereby minimizing the risk that these assets could be used to cover the firm’s operational costs or be affected by the firm's financial difficulties.

Segregation is crucial because it ensures that in case of a firm's bankruptcy or any financial distress, customer assets are not entangled with those of the firm and can be identified and returned to the rightful owners. This separation is a fundamental principle of fiduciary duty that financial institutions owe to their clients.

The other options contradict this principle. Combining customer and firm funds poses a significant risk to clients and violates regulatory standards. Utilizing customer funds for firm expenses is not permissible and would jeopardize the integrity of client assets. Lastly, liquidating customer assets without permission is illegal and breaches the trust and agreements established between the firm and its customers. Therefore, the correct answer reflects the essential obligation that carrying firms have to their clients in ensuring the safety and separate management of client assets.