Standard Chartered’s new fixed income prime brokerage offering, connected to its own custody and repo financing capabilities, has proven popular with hedge funds, according to Andy Sterry, co-head of prime services at Standard Chartered.
Sterry said the number of customers using the service has doubled so far this year and the aim is to repeat that growth in 2020.
Commenting on the growth, Sterry explained: “Essentially, we’re now able to offer a custody service with a financing facility on top. This means that clients can leverage our custody network, access segregated traders, utilise pre-agreed financing terms and benefit from a client solutions team to manage settlement processes.”
He added: “Fixed income prime brokerage is the natural next step for the prime business and one which complements our existing prime services products as well as the bank’s commercial, corporate and institutional banking franchises.”
Standard Chartered initially entered the prime space in 2014, focusing on servicing over-the-counter clearing demand, with foreign exchange and rates products added soon after.
The fixed income prime platform was launched in 2018 with a selection of buy-side clients.
James Barten, head of the new fixed income prime brokerage unit, described the product as “a partnership between Standard Chartered’s prime services and securities services unit”.
Barten said Standard Chartered’s clients are “finding the idea of having a custody account linked in with a prime services account appealing, particularly due to the ease of switching assets between long custody and financing in an automated fashion”.
He commented: “On the custody side, the fixed income prime product is plugged into all our four custody hubs—Hong Kong, Singapore, Dubai and Mauritius.”
He added: “We can replicate all of Standard Chartered’s offshore financing capabilities offered by the repo desk under fixed income prime brokerage. This combined approach means we can offer clients line by line financing down the credit curve, commercial haircuts, as well as broad access to collateral supply across the fixed income asset spectrum.”
