Client is a well known investment bank that has been engaged in the Derivative/Synthetic Equity Financing business for years.  In recent years, significant growth in market volume, participants, and traded transaction types raised client demand for greater flexibility in the integration of products with their prime brokerage accounts.

However, as overall volumes and customization requirements increased, the client faced organizational and technological challenges in creating an infrastructure that was more suited to the new mix of business, hampering the growth of the business.  A new strategic objective was issued from senior management to create a more flexible and scalable global infrastructure. This new product offering, supported by a unified client service model, would require integration with Prime Brokerage, as to service a large constituency of Equity Derivative clients.

A system that contained product capabilities was produced, enabling a fully customized offering with deal terms that met each client’s needs.  Clients are provided a pre-defined synthetic facility in the form of sub-accounts by product, allowing for easier grouping of trades/deals.  

• BETTER TRADE EXECUTION
  Clients will be able to use a variety of channels to submit orders for execution of all listed and OTC products. Orders are handled by a Sales Trader or are electronically channeled to the relevant area (e.g. Cash Equity, Rates Desk, Program Trading) for best price execution.
• FLEXIBILITY
  Provides the ability to customize contract terms such as equity reset frequency, interest reset frequency, maturity, adjustable portfolios and long and short exposure in single deals. This enables clients to customize the frequency of P&L realization and yield to their specific needs.
• REDUCED DOCUMENTATION
  A reduction in the documentation burdens in high transaction volume situations, without compromising the quality of the process from the perspective of either the customer or the client.
• RISK MANAGEMENT
  Provides the ability to margin Synthetic investments, utilizing a Portfolio (i.e. VAR) model for cross-margined and synthetic-only positions.
• CONSOLIDATED REPORTING
  Application includes support for product report generation and delivery. This includes reset notices, valuation and activity reports. Reports on integrating cash and derivative position risk are available through interactive, on-demand and scheduled channels.