Prime broker
Prime brokers are typically investment banks which are able to sell clients, often hedge funds, a 'one-stop shop' service.
Prime brokers are typically investment banks which are able to sell clients, often hedge funds, a 'one-stop shop' service.
These clients expect the banks to handle trades in securities that may be complex, illiquid and denominated in multiple currencies, quickly find counterparties that can lend stock so a hedge fund can 'sell short', manage 'margin' requirements for complex derivatives positions (handling the calculations and notifying the fund when more collateral is required) and assist with the regulatory reporting and accounting requirements that arise on a large, diverse portfolio.
Banks that have all of this expertise can command big fees in return.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
HMRC confirms crypto ETN ISA rules
With crypto ETNs now technically available for UK retail investors, HMRC has confirmed they can be held in an ISA – but there’s a complication
-
Pensioners targeted in fine wine scams – the tactics to watch for
Wine has emerged as the latest lure in investment fraud, with pensioners being specifically targeted by scammers