Expert Opinion

Jonathan Brewer, Managing Partner of IS Prime talks about FX Prime Brokerage and the evolving Prime of Prime brokerage landscape

First Published: e-Forex Magazine 60 / Expert Opinion / April, 2015

What has driven the rise in popularity of FXPBs in recent years? As retail brokers started to move from pure B Book business models to either hybrid or full STP models, the interest in FXPBs inevitably took off. Many of these brokers could not fulfi l the onerous requirements insisted upon by the primary PBs and therefore there was a natural gap which gave rise to the Prime of Prime brokers. The space has become popular purely by virtue of the fact that PoPs provide the conduit between the retail and wholesale markets. By enabling their retail broker clients to directly access Street liquidity at competitive levels of leverage without the need to place vast amounts of capital to support their trading. Cash and positions are consolidated with one counter party and thus the operational burden is also mitigated.How is this model evolving to meet the changing needs of clients? I don’t feel that the market is really evolving, at least not at the speed that clients should expect. PoPs are beginning to...continued

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