Jesse Drennan Director, Product Marketing, Traiana, Inc.
Jesse Drennan Director, Product Marketing, Traiana, Inc.

Reconciling Multi-Party Trading Relationships

Jesse Drennan examines how automation of prime brokerage operations has created an IT overhead for fund managers and provides a solution to overcome the problem of competing protocols.

First Published: e-Forex Magazine 26 / FOCUS / January, 2007

As the foreign exchange prime brokerage market first began to take shape in the early 1990s, there were very few parties offering the service. FXPB began its growth in popularity and related trading volume later that decade, but remained a narrow niche. It wasn’t until this decade, and the past few years in particular, that the sector began to experience explosive growth rates, driven to a great extent by the parallel surge in hedge funds in general, and their increasing appetite for FX as an asset class in particular.Multi-prime relationshipsAs the FXPB product has matured and the market become more comfortable with it, hedge funds have begun to introduce additional prime relationships beyond their original prime broker. An offshoot of these multi-prime relationships has been that fund managers face an intricate array of processing options and service levels depending on the capabilities and policies of their various PBs. These options can vary dramatically depending on the size and strategy of...continued

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