E-Forex_UK_April

FEATURE
brokers is nothing new. “It will depend on a client’s and full connectivity with a full spectrum of industry
business.Typically, if a client has multiple prime standardised tools.This complete ﬂ exibility means
brokers it is two, occasionally, depending on the size we can really help clients, which are using the multi-
and the scope of the client’s business, they may employ prime brokerage arrangement by not forcing them to
three, but that is rare. However, for most ﬁ rms, the have to change their existing workﬂow to ﬁ t us. We
more prime brokers you add, the less efﬁcient the are completely adaptable and can comfortably ﬁ t in
model becomes.” with our clients’ workﬂows.”
But for Martine Bond, global head of FX prime She says that a lot of clients useTraiana’s Harmony
and integrating with this network has been verybrokerage at Morgan Stanley, the move towards a
successful but, because Morgan Stanley has builtmulti-prime environment has been one of the biggest
it’s FX prime brokerage model to offer maximumtrends to emerge over the past two years. She says:
ﬂexibility, even if clients are not using industry“Until two years ago, a signiﬁcant proportion of
standards, Morgan Stanley can still work with them tothe larger hedge funds and broker dealers would
integrate any format they need to make the FX primeconsolidate all of their risk with one counterparty.
brokerage offering seamless for them.This was particularly evident in the FX prime
brokerage community, however we have seen a move
Multi-asset offeringsaway from the single prime broker model with most
clients, large and small, adding a second or even a Morgan Stanley’s FX prime brokerage has also been
third counterparty.” built with another trend in mind – the growing
interest in cross-asset class trading – and the offering isShe adds, however, that moving to multi-prime
cross-product with seamless access to trading platformsbrings additional considerations from a client’s
for listed derivatives, ﬁxed income instruments, FXperspective.There may be additional operations
and equities instruments, alongside OTC clearingand IT requirements to maintain an efﬁcient multi-
services for credit derivatives and interest rate swaps.prime model, and there may be some fragmentation
of margin if clients hold a trading portfolio across Bond says: “If you are a client looking for a prime
multiple counterparties. In general, however, the broker, not only can you receive Morgan Stanley’s
security and back up offered by an active second expertise in each product, but you can also access a wide
prime broker is now considered by clients- and their range of instruments and experience the full breadth
investors- to be an essential component of prudent
post-crisis business.
Morgan Stanley has had an FX prime brokerage
business for a number of years. However the business
was traditionally focused on servicing clients of the
ﬁrm’s equity prime brokerage offering, and for whom
FX activity is usually more limited and solely for
hedging purposes. In early 2009, Morgan Stanley
moved to aggressively expand and augment its FX
prime brokerage offering, spending the last year
creating a broad and comprehensive FXPB platform,
which is now successfully partnering numerous
standalone FX clients.
Bond says: “Morgan Stanley is a relatively new to
the FX prime brokerage market and so we have been
able to shape the business around our experience and
in line with clients’ needs today. As a result of this
new trend towards multi-PB, the most important
consideration we have built into our FXPB platform Ed Pla
is the ﬂexibility to create the smoothest possible “Clients will increasingly look to partner with providers
integration process for our clients. We have multiple who can provide comprehensive market access for both
connectivity solutions, broad capabilities in terms of multi venue execution and clearing.”
the types of reporting we can send back to clients,
|102 april 2010 e -FOREX
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