81,821
edits
Prime broker: Difference between revisions
Jump to navigation
Jump to search
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
{{anat|PB}} | |||
A prime broker is the business division of an [[Investment Bank]] that looks after [[hedge fund]]s. | A prime broker is the business division of an [[Investment Bank]] that looks after [[hedge fund]]s. | ||
| Line 4: | Line 5: | ||
Prime brokers — fondly known in the trade as [[PB|PBs]] — usually provide the following services: | Prime brokers — fondly known in the trade as [[PB|PBs]] — usually provide the following services: | ||
*'''[[Custody]]''': looking after the {{tag|hedge fund}} | *'''[[Custody]]''': looking after the {{tag|hedge fund}}’s “long” investment portfolio - (but this is because they like to [[reuse]] all those lovely assets) | ||
*'''Bank accounts''': running a multicurrency cash account - from which they can lend money. | *'''Bank accounts''': running a multicurrency cash account - from which they can lend money. | ||
*'''[[Stock lending]]''': lending the {{tag|hedge fund}} the assets it needs to settle [[short sale]]s, and lending it the money it needs to buy assets. | *'''[[Stock lending]]''': lending the {{tag|hedge fund}} the assets it needs to settle [[short sale]]s, and lending it the money it needs to buy assets. | ||
*'''[[Synthetic prime brokerage]]''':providing the {{tag|hedge fund}} with [[derivative]] exposure to assets as an alternative to the [[hedge fund]] buying them outright). Often in the trade called “[[CFD]]”s. This may involve accepting [[give-up]]s from other [[executing broker]]s. | *'''[[Synthetic prime brokerage]]''':providing the {{tag|hedge fund}} with [[derivative]] exposure to assets as an alternative to the [[hedge fund]] buying them outright). Often in the trade called “[[CFD]]”s. This may involve accepting [[give-up]]s from other [[executing broker]]s. | ||
*'''[[Swap]]s and {{tag|ETD}} | *'''[[Swap]]s and {{tag|ETD}}''': Providing general exposure to swaps, futures, options and that sort of thing. | ||
[[Prime broker]]s often also have a consulting arm which helps a nascent {{tag|hedge fund}}s get off the ground: setting it up, finding offices, hiring people, engaging lawyers, recommending (cough) [[prime broker]]s, and [[capital introduction]]. | [[Prime broker]]s often also have a consulting arm which helps a nascent {{tag|hedge fund}}s get off the ground: setting it up, finding offices, hiring people, engaging lawyers, recommending (cough) [[prime broker]]s, and [[capital introduction]]. | ||
| Line 15: | Line 16: | ||
===What prime brokers don’t do=== | ===What prime brokers don’t do=== | ||
*'''Act as {{tag|PB administrator}}''': While they look after assets, prime brokers don’t calculate {{tag|NAV}} ( | *'''Act as {{tag|PB administrator}}''': While they look after assets, prime brokers don’t calculate {{tag|NAV}} (that’s the {{tag|PB administrator}}’s job) | ||
*'''Act as {{aifmdprov|depositary}}''': [[PB]]s, which tend to be situated in London, or New York, generally cannot act an official {{aifmdprov|depositary}} for {{tag|AIFMD}} purposes (though they may get delegated the safekeeping role and may act as a {{aifmdprov|depo-lite}}) | *'''Act as {{aifmdprov|depositary}}''': [[PB]]s, which tend to be situated in London, or New York, generally cannot act an official {{aifmdprov|depositary}} for {{tag|AIFMD}} purposes (though they may get delegated the safekeeping role and may act as a {{aifmdprov|depo-lite}}) | ||
*'''Act as an [[executing broker]]''': They don’t themselves work equity orders for their clients (though their compadres across the [[Chinese wall]] in the equities trading division at the same investment bank almost certainly will) | *'''Act as an [[executing broker]]''': They don’t themselves work equity orders for their clients (though their compadres across the [[Chinese wall]] in the equities trading division at the same investment bank almost certainly will) | ||
| Line 26: | Line 27: | ||
See especially in the context of {{tag|AIFMD}}: [[Prime broker - AIFMD Provision]]. | See especially in the context of {{tag|AIFMD}}: [[Prime broker - AIFMD Provision]]. | ||
*Also [[Law of Property Act 1925]] | *Also [[Law of Property Act 1925]] | ||