Prime brokerage agreement disclosure annex: Difference between revisions

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The famous [[prime brokerage disclosure annex]] mandated by CASS {{cassprov|9.3}}. Note especially the second part, which refers explicity to the [[CF10a]]’s personal responsibility for making sure everything is tickety-boo. Which will mean your local [[CF10a]] might be inclined, almost imperceptibly, to obsess madly about your catalogue of [[prime brokerage disclosure annexe]]s at every waking moment (yours or {{sex|his}}).
{{a|pb|}}{{c|Prime Brokerage}}The famous [[prime brokerage disclosure annex]] mandated by CASS {{cassprov|9.3}}. Note especially the second part, which refers explicitly to the [[CF10a]]’s personal responsibility for making sure everything is tickety-boo. Which will mean your local [[CF10a]] might be [[inclined]], almost imperceptibly, to obsess madly about your catalogue of [[prime brokerage disclosure annexe]]s at every waking moment (yours or {{sex|hers}}).


Here's a summary:
Strictly speaking, one only needs a [[PBDA]] if one is [[Reuse|reusing]] or (as our American friends like to say, “[[Rehypothecation|rehypothecating]]” [[client assets]]. If you don’t [[reuse]] custody assets — that is, you have no right to transfer them to your own account for your own nefarious purposes,<ref>not really nefarious, obviously</ref> you don’t need to provide your client with a [[PBDA]].


{{Nuts|CASS|9.3}}
The rule, which was not significantly modified by [[MiFID II]], you can see in original here: {{handbook|CASS|9|3}}
 
===Contrarian view===
And here's the whole thing:
The PBDA is one of the great work-creation schemes of the modern age. For some reason the FCA requires prime brokers to tell clients — by way of a formalistic document having no legal effect — exactly the terms on which the PB may reuse their assets, despite the fact that the customer will likely have its own legal department and an external advisor to thrash these things out for it, and whom really are far better placed to provide this information should it suddenly forget.
 
{{sa}}
{{casssnap|9.3}}
*[[Prime brokerage]]
 
{{ref}}
But check the original souce: {{handbook|CASS|9|3}}
====Discussion====
Note strictly speaking you only need a [[PBDA]] if you are rehypothecating client assets. If you don't custody assets, or you have no right to transfer them, you don't need to supply an annex.
 
{{cassanatomy}}

Latest revision as of 11:18, 16 September 2021

Prime Brokerage Anatomy™
There is no industry standard prime brokerage agreement, so this is not so much an anatomy as a collection of resources about an amorphous subject.
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The famous prime brokerage disclosure annex mandated by CASS 9.3. Note especially the second part, which refers explicitly to the CF10a’s personal responsibility for making sure everything is tickety-boo. Which will mean your local CF10a might be inclined, almost imperceptibly, to obsess madly about your catalogue of prime brokerage disclosure annexes at every waking moment (yours or hers).

Strictly speaking, one only needs a PBDA if one is reusing or (as our American friends like to say, “rehypothecating” client assets. If you don’t reuse custody assets — that is, you have no right to transfer them to your own account for your own nefarious purposes,[1] you don’t need to provide your client with a PBDA.

The rule, which was not significantly modified by MiFID II, you can see in original here: CASS Chapter 9

Contrarian view

The PBDA is one of the great work-creation schemes of the modern age. For some reason the FCA requires prime brokers to tell clients — by way of a formalistic document having no legal effect — exactly the terms on which the PB may reuse their assets, despite the fact that the customer will likely have its own legal department and an external advisor to thrash these things out for it, and whom really are far better placed to provide this information should it suddenly forget.

See also

References

  1. ↑ not really nefarious, obviously
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