Onboarding: Difference between revisions

Onboarding (view source)

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 *'''Design in ''interoperability''''': Design for the positive development of your relationship in directions you didn’t expect. Make your documents as adaptable as possible. Your client may open business and wish to move to Europe. It may start trading FX and move to equities. Have a platform that allows a client to quickly add services, or switch.
 *'''Make structural change easy''': Design in a facility to bulk-amend to cope for inevitable regulatory changes. MiFID 3, ahoy!
-*'''Don’t obsess over the disaster scenarios'''. Build basic protections against the failure of the relationship or your counterparty — failure to pay, insolvency —but beyond that, remember this is a relationship, and intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by having an arsenal of weapons available to you should that meltdown come about. Think Chernobyl: by the time the core explodes, it’s kind of too late.
+*'''Don’t obsess over the disaster scenarios'''. Build basic protections against the failure of the relationship or your counterparty — failure to pay, insolvency — but beyond that, remember this is a relationship. as to which...
+===[[Relationship contract]]s===
+But, but, but — why must it be that our onboarding process does nothing ''but'' obsess about disaster scenarios? We know of cases where even affiliated broker-dealers have laboured for ''years'' to conclude a simple [[Global Master Securities Lending Agreement|stock lending agreement]]. Entities under common control in the same group.
+Every element of it is arrayed ''against'' the client, as if the client is until proven otherwise, a money-laundering dissolute gambler and fraud who will stop at nothing to subvert your legitimate interests in making a fair return out of your relationship.  Now the [[JC]] is certainly not naive enough to think there are no institutions like that in the ecosystem. There certainly are. We assume a broadly Hobbesian view of human nature in the wild. But that is not the point. The point is that, even against such bounders and cads, a mute legal document is no kind of protection. [[Don’t take a piece of paper to a knife-fight]]. Your practical risk is better managed by, well, actual risk management. This is what half of your employees are engaged by the firm to do, after all,
+Intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by having an arsenal of weapons available to you should that meltdown come about. Think Chernobyl: by the time the core explodes, it’s kind of too late. and intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by having an arsenal of weapons available to you should that meltdown come about. Think Chernobyl: by the time the core explodes, it’s kind of too late.