Non segregated funds? Stupid question.

I just opened a mini account with broker X and in the application form I had to acknowledge that I am aware of the following:

Broker X has the right to hold on to my "non segregated" funds as broker X pleases (essentially).

My question is: What are/constitutes non segregated funds?

Is the money that I will be trading with in my MT4 account supposed to be segregated?

Thanks in advance!