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# notice the relationship between clearing firm and a clearing corporation.

Also, the terminology of


“correspondent clearing”.

# notice the repo is to financing high quality debt securities. Also those securities will be given out as the
collateral.
# because prime broker can consolidate the portfolio and if the portfolio is high quality, then the prime
broker can help setting up the repo business. Different from security lending business, in the repo
business, securities are sold and bought back. In security lending business, only cash is used as collateral.

# the locked up in seg is a special term. It is still the margin account belongs to the client. The client uses
this share for some financing from the prime broker. And prime broker can not loan more than 140% of
the market value of these securities.
# notice some terminology: 15,000 against margin positions, meaning the prime broker lent out 15,000
shares and the client puts up some collateral in the margin account. Trading account has a short position
of 10,000 shares, meaning the share is already sold.
Loaned stock: prime broker loan the stock to client
Margin account: client has to put some collateral for the margin.

# From prime broker’s view point, the benefit is mainly the inventory addition by using client’s portfolio.

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