ADS Securities extends FX prime brokerage offering to institutional clients in Asia

In a move to help fill the growing credit gap the FX industry is now seeing, ADS Securities, the global FX brokerage, today announced the launch of its award-winning Prime of Prime (PoP) solution in Asia. The firm’s latest PoP offering has been specifically tailored to institutions in Asia, with a heightened focus on locally favoured currencies, including non-deliverable forwards (NDFs), as well as expanded liquidity and credit lines with preferred dealers in this space.

Beginning 2nd September 2016, ADS Securities will offer institutions in Asia access to over 45 different currencies (including precious metals) and liquidity from over 80 different venues via a disclosed, tailored liquidity pool, as well as a more unique and sophisticated offering that allows clients to leverage their existing relationships with liquidity providers (akin to traditional FX prime brokerage). Clients will also be able to benefit from ADS’ PoP services with no mark up on the direct liquidity seen from the chosen dealers, supported by 24 hour global coverage including local support in Asia.

Marco Baggioli, Executive Managing Director & Global Head of Brokerage, ADS Securities, said: “In just two months our innovative Prime of Prime service has generated enormous interest. Much like Europe, there is a clear need in Asia for credit intermediation services that are a true reflection of a direct prime brokerage relationship, with direct access to liquidity backed by strong capital and credit relationships.”

“There are more currencies in Asia than in Europe or anywhere else in the world, and Asian institution need to trade in their domestic currencies. Our offering is designed to meet the growing demand for improved access and liquidity to NDF pricing.”

“ADS Securities is committed to unlocking the potential of Asia’s emerging markets by providing unique liquidity that truly bridges the East and West,” he added.

The Swiss National Bank event of January 2015 saw many Tier 1 banks facing higher capital requirements, higher costs and reduced profitability—prompting tighter regulation and reducing their credit and risk appetites. This in turn triggered the sharp decline of FX-only prime brokerage services with those remaining banks, the drastic retrenching of offering scope, and an increase in minimum requirements, ultimately creating a much higher barrier of entry.

Subsequently, an estimated 25 per cent drop in available FX trading lines has led to wider spreads, higher prices and increased foreign currency exposure for many industry participants.

While it has been argued that the credit crunch that has affected the western trading landscape does not necessarily hinder eastern markets, technology infrastructure and firewalls mean that traders in Asia are often exposed to intermittent price interruptions, particularly during periods of heightened volatility. As a result, access to PBs (Prime Brokers) in Asia have consequently become extraordinarily costly, demanding huge margin requirements, creating a growing demand for improved access to credit and liquidity.

Francis Lee, Managing Director- Asia, at ADS Securities, said: “The market in Asia is evolving from the Introducing Broker (IB) model to full institutional provisioning. Brokerages in Asia have an on-the-ground presence, and possess the local know-how. The brokerages with London offices, meanwhile, have the advantage of operating in the largest FX hub in the world, and are protected by one of the most recognized regulatory authorities (FCA) in the world.”

“Firms like ADS Securities who have strong balance sheets, a global footprint and an exceptional network of relationships with multiple top-tier prime brokers behind and supporting our PoP offering, have a clear advantage,” Lee concluded.

The ADS Securities Prime of Prime offering is led by Louisa Kwok, who recently joined ADS Securities from BNP Paribas, where she was Head of Relationship Management –EMEA for its prime brokerage and clearing businesses. The global PoP team is comprised of experienced executives who have held senior positions in the FX and traditional prime brokerage industry at a number of top tier investment banks.

Domestic and regional retail brokers, tier 2 and 3 banks, along with small to medium hedge funds, start-ups, and family offices will all benefit from the access to diversified liquidity, in addition to ADSS’ own, through Prime of Prime. Clients will gain access to intraday and overnight trading lines, and receive comprehensive reporting and credit monitoring.