What Is Prime Brokerage Agreement

The most prominent players in the prime brokerage game are well-known names in the world of finance. Here are six major financiers who actively offer first-class brokerage services; Keep in mind that these companies also offer traditional intermediation services to individuals: customers who make short sales or significant leverage are therefore a more lucrative opportunity than customers who make fewer short sales and/or use minimal leverage. Clients whose market activities are primarily focused on fixed income generally earn less prime brokerage revenues, but they can still offer significant economic opportunities in the Investment Bank`s Repo, Currencies (fx), Futures and Flow divisions. One of the central issues is the level of protection by asset separation and the speed at which assets can be returned to hedge funds. Certain conditions for premium brokerage contracts are essential in this regard. For example, if the first broker is allowed to use group companies as a sub-custodian and then becomes insolvent, it can be very difficult for the insolvent prime broker to recover clients` assets and, if he recovers the client`s assets, he cannot recover the entire amount. The use of omnibus client accounts and the existence of security rules of interest, not only for the benefit of the first broker, but also subsidiaries of the first broker, can lead to similar deficits and delays in the event of performance problems. An agreement between a countervailing broker and a client in which the countervailing broker enters into first-class brokerage transactions. Maybe your transacting with such a broker is going so well that you will be able to create your own hedge fund or a large-scale trading operation. In this case, you need a first class brokerage contract…

But in the meantime, your needs are modest and you shouldn`t worry about it. The future of the British brokerage model In fact, it is increasingly clear that the US offers greater protection to first-class brokerage clients than the UNITED Kingdom.