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Synthetic prime brokerage: Difference between revisions
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{{a|PB|[[File:Synthetic equity swap.jpg|450px|thumb|center|[[A twisty spy technique]], yesterday.]]}} | {{a|PB|[[File:Synthetic equity swap.jpg|450px|thumb|center|[[A twisty spy technique]], yesterday.]]}}A topic of ''great'', sudden, interest in the wake of the [[Archegos]] scandal. | ||
''Also called [[synthetic equity swap]]s, [[contracts for difference]]<ref>This has been apt to confuse people; be warned.</ref> or [[high-delta equity derivative]]s.'' Cryptic crossword fans — JC has become addicted over lockdown — may also be thrilled to know how good “[[synthetic equity swap]]” is for generating anagrams. ''A twisty spy technique'', for example. Or ''witty, peachy inquests''. If you wanted to know ''why typist quit seance'', or have ever been dismayed by ''quite whiny typecasts'', this may be your inner [[equity derivative]] [[structurer]] banging on your cranium and trying to get out. | |||
''Also called [[portfolio swap]]s, [[synthetic equity swap]]s, [[contracts for difference]]<ref>This has been apt to confuse people; be warned.</ref> or [[high-delta equity derivative]]s.'' Cryptic crossword fans — JC has become addicted over lockdown — may also be thrilled to know how good “[[synthetic equity swap]]” is for generating anagrams. ''A twisty spy technique'', for example. Or ''witty, peachy inquests''. If you wanted to know ''why typist quit seance'', or have ever been dismayed by ''quite whiny typecasts'', this may be your inner [[equity derivative]] [[structurer]] banging on your cranium and trying to get out. | |||
Why are all these things called “[[synthetic prime brokerage]]”, then? Well, because economically this is ''physical'' [[prime brokerage]] — that is, [[Brokerage|equity brokerage]] done on [[margin lending|margin]] only done with ''[[swaps]]'' on [[shares]], and not ''actual'' [[shares]]. The client never actually owns the [[share]]: instead, his [[swap dealer]] buys it, and passes on the economic return under an [[equity derivative]]. | Why are all these things called “[[synthetic prime brokerage]]”, then? Well, because economically this is ''physical'' [[prime brokerage]] — that is, [[Brokerage|equity brokerage]] done on [[margin lending|margin]] only done with ''[[swaps]]'' on [[shares]], and not ''actual'' [[shares]]. The client never actually owns the [[share]]: instead, his [[swap dealer]] buys it, and passes on the economic return under an [[equity derivative]]. | ||
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{{sa}} | {{sa}} | ||
*[[Archegos]] | |||
*[[871(m)]] of the [[Internal Revenue Code of 1986]] | *[[871(m)]] of the [[Internal Revenue Code of 1986]] | ||
*[[synthetic prime brokerage and the risk of tax recharacterisation]] | *[[synthetic prime brokerage and the risk of tax recharacterisation]] | ||