FEATURE
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Te strength of any top tier FX prime broker lies in its ability to offer products and services that meet the specific needs of clients’ and in consideration of regional implications, Reilly adds. He says that offering a global product with seamless 24/5 coverage, dedicated resources within each region, an in depth understanding of local regulation and continuously engaging clients to assess their requirements is inherent for any FXPB business to be successful as a global platform.
Morgan Stanley’s FXPB and e-commerce platform are fully integrated. Te new and award-winning e-commerce platform, Matrix, uses cutting-edge technology to deliver the firm’s intellectual capital, execution
capabilities and a fully integrated FX prime brokerage portal. “By continuously soliciting client feedback and regularly tailoring solutions based on clients needs we strive to ensure that our dealing and prime brokerage platform is at the forefront of technological innovation as markets evolve.
“Clients are able to measure Morgan Stanley’s commitment through our partnership, ability and willingness to create bespoke solutions and our continuous product growth and expansion in an ever changing market environment,” adds Reilly.
Getting ahead of the game
Colin Telmer, global head of FXPB at Barclays Capital, says that a number of forces related to the credit crisis in late 2008 have increased FX trading and the demand for FXPB services. Although there has been increased interest from investors, portfolio managers and other market participants in trading FX as an asset class in its own right, new legal and margin requirements for FX trading have resulted in clients reducing the number of bilateral relationships they maintain to one or two FXPB providers.
46 | april 2011 e-FOREX
Telmer says: “Clients are looking to obtain FXPB services from firms that have developed strong rates and CDS clearing solutions, in the expectation that FX will also move to a clearing model. By choosing a prime broker with an established clearing business, clients can get ahead of the transition to clearing and at the same time get the benefits of FXPB post trade services such as reporting and cash management.”
For Telmer, the value proposition for FXPB continues to strengthen for many client groups and it is expanding into client groups that traditionally have not considered FXPB services. Tis is because clients can tap into a significantly larger pool of liquidity by trading through a prime broker with a large number of execution banks as well as sponsored access to a number of ECNs.
He says: “Barclays Capital FXPB is part of the integrated Barclays Capital Prime Services Division and, although FXPB and the FX execution desks (BARX and voice) are separated by a Chinese wall, there is a strong joint venture between the two groups allowing clients to tap into one of the largest liquidity pools in the world.”
Servicing complicated flow
Telmer adds that FXPB providers, such as Barclays Capital, that can service complicated flow (i.e. high volume, managed accounts, pipping, etc), can provide significant operational efficiencies to clients, enabling them to greatly increase their activity without in- house efforts. Furthermore, Telmer adds, FXPB providers that can offer significant margin efficiency by employing portfolio margin methodologies across the client’s book, can offer a client a streamlined margin process and benefit from correlations in their portfolio.
“Barclays Capital Prime Services provides margin efficiencies across FX cash and futures, as well as providing cross-asset margining across equities, fixed income, futures, OTC rates and CDS clearing, and FX,” he says.
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