Frances Maquire
Frances Maquire

Raising the bar - what's prompting change in the foreign exchange Prime Brokerage business?

Frances Maguire sets out to determine what demands clients are now making on their FXPB Providers and why it's becoming harder to differentiate their offerings.

First Published: e-Forex Magazine 25 / Features / October, 2006

FX prime brokerage as a mainstream service has expanded beyond the hedge fund world to embrace all client types who are recognising the benefits it can bring to their business. It's recently become an increasingly competitive arena, with clients demanding more effective reporting, increased account control and robust automation, finding it harder to differentiate amongst providers.The phenomenal growth in FX prime brokerage in just five years, fuelled by the transformation of the FX market by electronic trading and the increased liquidity provided by FX ECNs, is very much down to the hedge funds and the simple fact that FX is now traded as an asset class in its own right. While there is no doubt that banks sold prime brokerage in the early days in order to boost FX volumes and increase margins, today, the focus has very much changed and it is not FX margins they are chasing so much as the bigger prize of a guaranteed revenue stream by processing as a prime broker. The pitch has also changed. In the early days...continued

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