FX Prime Brokerage: beyond electronic messaging

Ed Hulina believes that providing an effective and compelling FXPB offering requires going beyond electronic messaging.

There is a lot of attention focused on the topic of FX prime brokerage these days. Much of the focus is on the industry drive to furthering automation of give-up messaging. However, providing an effective and compelling FX prime brokerage offering requires going well beyond electronic messaging.A bit of backgroundFor those not familiar with FX prime brokerage (FXPB), a bit of background may be necessary. FXPB is aimed primarily at investors who require operational and/or collateral efficiencies, where the prime broker (PB) acts as a central counterparty to all the client’s transactions. The PB holds any necessary collateral required for trading with multiple counterparties, and in turn extends credit lines to the client with a number of banks that the client wants to trade with (the “executing banks”). The PB effectively becomes the central back-office with which the client interacts, so is expected to provide a number of premium operational services, such as...continued