Monday, March 9, 2009

Prime Brokers Move Away from "Give-Up" Arrangements

The Financial Times reports that many prime brokers are informing hedge fund clients that "give-up" services will cease as of April. "Give-up" services allowed a fund to trade OTC derivatives with different counterparties. At the end of each trading day, the prime broker brought all of the trades under its platform, which simplified the process for managing these derivatives, including the posting of collateral and reconciling trades.

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