Guide to Sound Practices for Selecting a Prime Broker

Published: 01 December 2014

This Guide, published in December 2014, incorporates changes to the regulatory framework that affects the relationship between managers and prime brokers, including reporting requirements and other new measures introduced under the Dodd-Frank Act in the US and Europe’s Alternative Investment Fund Managers Directive (AIFMD) and the European Market Infrastructure Regulation (EMIR). It also reflects the greater degree of due diligence being conducted on prime brokers and the evolution in the prime brokerage model since the financial crisis. It contains guidance on appointing a prime broker and issues to be aware of when selecting more than one prime broker, and also highlights the likely impact of future regulatory changes. In addition, it discusses the core services of prime brokers and defines a number of key commercial terms.