We examine the reality of genuine FX prime of prime brokerage and what to look for when accessing true market liquidity
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Andrew Saks-McLeod and Paul Orford examine the current explosion in Prime of Prime and non-bank institutional liquidity provision, and how this will go one of three ways!
“Institutional clients, and their retail clients in the case of retail brokers, can end up with a far better deal if they can access liquidity directly from their prime of prime but still have the ability to take whichever direct price feed they prefer” – James Watson, CEO, ADS Securities, London.
It is the opinion of many Swiss banking executives that I have spoken to this week that compliance, and not just balance sheet size, is a major, and unwritten consideration for Tier 1 banks when extending counterparty credit to the OTC sector. Here is my opinion
All new prime of prime brokerage launches in London, headed by Integral’s Ramy Soliman. We speak to him in detail
“Are you implying that some Prime of Primes are offering liquidity that is perceived to be based off direct relationships but turns out to be indirectly sourced? If so, there is a limitation on the capacity of liquidity that the provider can genuinely service without a deterioration in the pricing and execution” – Ramy Soliman, CEO, Stater Global Markets
Several meetings with senior Tier 1 bank executives and leaders of prime of prime brokerages in London recently have demonstrated that, as long as the criteria is met, the OTC FX industry is a vital business that the banks cannot afford to miss out on. Here are my findings thus far.