Their ability to provide access to a wider range of clients, coupled with their agility, customized solutions, and multi-asset offerings, positions them as key players in addressing the current and future needs of the market. Non-bank prime brokers are playing an increasingly significant role in the FX Prime Brokerage industry, particularly in the context of the ongoing consolidation. They use various kinds of investing and risk management methods in search of big returns.
Prime services provided by the broker-dealer division of StoneX Financial Inc. (SFI), Member FINRA/NFA/SIPC and registered with the MSRB. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. StoneX Financial Inc. and StoneX Outsourced Services LLC are wholly-owned subsidiaries of StoneX Group Inc. The Capital Introduction team works with managers to review their marketing plan and identify any gaps or weak points, helping clients align their message to the needs of the target investor. StoneX Prime clients can choose to custody their assets directly at StoneX Financial Inc. or at Pershing LLC, a subsidiary of The Bank of New York. Our custom-built reporting and trading systems allow clients to seamlessly use any combination of our custodians that works for them.
- In contrast to some competitors that have restricted their prime brokerage client base over the years, UBS has actually expanded and diversified the type of market participants it serves.
- The DCS team is aligned with and was built out of our globally recognized Prime Brokerage and Futures clearing business to maximize efficiency and provide consolidated reporting across asset classes.
- The new enhancements sought to enhance these changes and harmonise clients’ user experience irrespective of the platform chosen – desktop, mobile or browser – to access trading services.
- Over time, “prime brokerage” has come to be used more broadly, referring to the suite of services that investment banks and other financial institutions provide to a wide range of institutional clients.
- Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser.
Prime brokerages, at times referred to as prime brokers, are generally larger financial institutions that have dealings with other large institutions and hedge funds. The majority of large banks have prime brokerage units that service hundreds of clients. Though prime brokerages offer a large variety of services, a client is not required to take part in all of them and can have services performed by other institutions as they see fit.
In response to the tightening FX PB market, the concept of “Prime of Prime” (PoP) has emerged, primarily serving smaller market players. These PoP providers offer a more accessible route to liquidity and services, plugging the gap left by traditional prime brokers. Large broker-dealers, facing offboarding risks, are also engaging with multiple PoP providers as a strategic move. As a bank, it entered the market as one of the biggest ‘prime of prime’ FX brokerages, with a strong balance sheet and track record in both FX and technology provision.
Our experts offer in-depth knowledge of financial products, combined with local and global market intelligence, allowing us to service a variety of sophisticated business strategies. Our Capital Introduction team provides our hedge fund clients with targeted introductions to the world’s leading pension plans, endowments, foundations, family offices, sovereign wealth funds, insurance companies, funds of funds, private banks and consultants. Typically, the more PoP accounts or links to the big banks a retail broker can get, the better. The more tier 1 banks providing the retail broker with quotes and volume, the lower the retail broker’s spreads will be, all else being equal. This is why forex brokers advertise how much liquidity they have access to and which big banks are providing it.
This would not be possible if the broker didn’t link up with the tier 1 firms. A key aspect of this transformation is the growing importance of strategic client selection for FX prime brokers. The failure of institutions like Credit Suisse has emphasized the need for FXPBs to judiciously assess client risk profiles and trading strategies. The shift towards quality over quantity in client relationships is becoming crucial for sustainable and profitable operations in an increasingly complex and regulated market.
Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss. The Equity Synthetic Platform provides solutions such as efficient single stock and index exposure, market access, and custom hedges to a wide range of clients. When these entities start out they are too small to deal directly with the big banks and access their liquidity.
The services provided under prime brokering include securities lending, leveraged trade execution, and cash management, among other things. Prime brokerage services are provided by most of the largest financial services firms, including Goldman Sachs, UBS, and Morgan Stanley, and the inception of units offering such services traces back to the 1970s. As a leading European bank and a prominent global institution, BNP Paribas’ strong credit ratings provide our clients with confidence in all market conditions.
A PoP broker will have everything available readily for a company to set up its retail FX brokerage business in a short span of time. Additionally, it would also have the technical expertise to offer a non-latent interbank liquidity to a retail Forex broker. Using an industry-standard FIX (Financial Information eXchange) API, a PoP will be able to offer an aggregated data feed to popular trading platforms such as Meta Trader 4. DCS is designed to streamline the client clearing experience across products, asset classes and regions. In addition to credit default swaps and interest rate swaps, DCS will also support centralized clearing for foreign exchange, commodities and equity swaps as they become clearing-eligible. Our DCS business offers our clients numerous benefits including access to all major clearinghouses globally, margin solutions and optimized collateral management.
It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. StoneX Prime strives to provide clients with predictable and stable margin and portfolio margin policies to accommodate a wide range of investment objectives through various market conditions.
CFH Clearing builds trading infrastructure for banks and brokers, and emphasises that it can give access to any liquidity source and any prime broker, clearing tickets from the interbank market and connecting the primary market to the institutions. “We appeal to the smaller hedge funds as well as those that do not want to join the onboarding queue of three to six months for the major prime brokers. Also, as we have the economies of scale we can price very competitively,” says Mr Holst. As a leading European bank with a prominent global presence, BNP Paribas is one of the few banks globally with a comprehensive suite of investor services. Our multi-asset Prime Services offering provides clients with access to one of the broadest product capabilities across prime brokerage, clearing, and FX prime brokerage. For hedge funds or other institutional clients to get the kind of services that make having a prime brokerage account worthwhile (most notably discounted fees for trading), an account size of $50 million in equity is a likely starting point.
Many of these clients were leveraged in their positions; considering the pair dropped 41% after the announcement, this resulted in major losses for many clients. This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.
The term “prime brokerage” originated in the 1980s, when investment banks started to provide a comprehensive suite of services to hedge funds managers, which were becoming increasingly popular at the time. These services included financing, securities lending, execution, clearing and reporting. The term “prime brokerage” referred to the provision of these services to the most sophisticated and financially sound hedge fund clients. Over time, “prime brokerage” has come to be used more broadly, referring to the suite of services that investment banks and other financial institutions provide to a wide range of institutional clients. These now include hedge fund managers, mutual funds, pension funds and other large institutional investors. These services may include execution, clearing, settlement, financing and custody.
Benefit from Saxo’s connectivity to multiple technology vendors and low-latency pricing from quality price streams. Prime Of Prime Pop BNP Paribas’ best-in-class Execution Management System for listed derivatives trading, powered by Fidessa.