Frances Maguire
Frances Maguire

Strength, experience & innovation – pivotal issues when choosing a strategic partner for FX Prime Brokerage services

While FX prime brokerage is already a growth area, the added complexity of mandatory clearing for NDFs and FX options is likely to give the segment another boost as those drawn into clearing consider the benefits of a prime broker. Frances Maguire looks at what is in store.

First Published: e-Forex Magazine 47 / FOCUS / April, 2012

While many would agree that the addition of mandatory clearing for OTC products will add both greater cost and complexity to the FX prime brokerage model, few would dispute the fact that is could be seen as a mixed blessing. The need to manage both cleared and uncleared trades strengthens the case for using an FX prime broker and the need to have a clearing relationship in place in order to trade NDFs and FX options will most likely cause money managers that had not previously used an FX prime broker to reconsider the benefits. The challenge now is whether FX prime brokers can come up to the mark and show that operational and cost efficiencies can be gained through their services. Furthermore, FX options and the relatively illiquid NDF market are perhaps the last parts of the sector to move across to electronic trading and are still proving harder to fully automate and process straight through. Joe Buthorn“There is a whole host of potential new customers over the next few years that will engage with FX...continued

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