LeapRate Exclusive… LeapRate has learned that FX liquidity and prime brokerage services provider IS Prime, part of ISAM Capital Markets, has embarked on a campaign which is seeing it offer negative balance guarantees to Retail FX brokers, on a case by case basis.
The FCA regulated Prime of Prime brokerage has apparently developed this offering following requests from new and existing clients in response to new ESMA regulations which comes into force next week on August 1, 2018.
Jonathan Brewer, Managing Partner of IS Prime explains,
With the impending ESMA changes brokers will have to offer their retail clients negative balance protection. This has led to new risk factors for retail brokers to consider and is creating a certain level of panic in the industry.
We are increasingly seeing, particularly from the plethora of start-ups across Europe, that many brokers do not have the regulatory capital available or the appetite, knowledge or expertise to manage this risk. IS Prime, as a premium wholesale service provider in this industry, is able to manage and control these risks, leveraging the ISAM Capital Markets group, and as such can pass this expertise onto our clients. In response to client demand, we have agreed that, under the right commercial framework, we will offer brokers a negative balance guarantee down to an individual retail client level.
IS Prime provides institutional clients with multi-asset execution across Tier 1 aggregated liquidity venues together with Prime Brokerage services and cutting edge front to back technology. The London-based firm is part of ISAM Capital Markets, which also includes IS Prime Hong Kong and IS Risk Analytics.