The minimum account size for opening and receiving primary brokerage account services is $500,000 in equity, but it is unlikely that such an account will offer many benefits beyond what would be offered by discount brokers. For hedge funds or other institutional clients to get the type of services that make a top-notch brokerage account interesting (especially the reduced fees for trading), an account size of $50 million in shares is a likely starting point. Nevertheless, these services are highly sought after by customers and the best banks only accept customers who are most likely to benefit from them over time. For this reason, a hedge fund would likely need to have up to $200 million in equity to qualify for the best treatment. An agreement between a clearing broker and a client, whereby the clearing broker handles first-rate brokerage transactions. A blue chip brokerage is a group of services that investment banks and other financial institutions offer to hedge funds and other large investment clients who need to be able to borrow securities or cash to engage in clearing in order to generate absolute returns. Services provided under Prime Brokering include securities lending, execution of leveraged transactions and cash management. Blue-chip brokerage services are offered by most of the largest financial services firms, including Goldman Sachs, UBS and Morgan Stanley, and the creation of entities offering such services dates back to the 1980s. Top-notch brokers, sometimes referred to as prime brokers, are usually large financial institutions that deal with other large institutions and hedge funds. In 2018, for example, Morgan Stanley claims that its main brokerage unit serves as a partner to more than 800 hedge funds and institutional clients.
Although Prime Brokerage offers a variety of services, a client is not required to participate in all of them and may have services provided by other institutions as they see fit. A leading brokerage offers a range of services to qualified clients. The assigned broker(s) may provide settlement agent services as well as financing for leverage. Custody of assets can be offered as well as the daily creation of account statements. Prime brokers offer a level of resources that many institutions may not be able to have in-house. Essentially, a best-in-class brokerage service provides large institutions with a mechanism to outsource many of their investment activities and focus on investment objectives and strategies. In securities lending, the guarantee is often required by Prime Brokerage. This allows them to minimize the risks they face and access funds more quickly when needed. Blue-chip brokerage services aim to facilitate the diversified and active trading operations of large financial institutions such as hedge funds. At the heart of their role are prime brokers, which allow hedge funds to borrow securities and increase their leverage, while acting as intermediaries between hedge funds and counterparties such as pension funds and commercial banks. NEW ACCOUNT APPLICATION ACCOUNT NUMBER BRANCH NUMBER I (We) would like to open a brokerage account with you (my broker).
As far as I know, you have named Apex Clearing Corporation (clearing firm concierge type services may also be offered. This may include risk management, capital introduction, securities financing and cash financing. Some even go so far as to offer the possibility of subletting offices and providing access to other facility-related benefits. As with more traditional offers, participation in one of the concierge services is optional. 9. Fees and Charges You understand that Legent Clearing may charge commissions and other fees for release or other services provided to you, and you agree to pay such commissions and fees at Legent Clearing`s then-applicable rates. You further understand that the Service Fee, if any, may change from time to time after you have been notified in writing. 10. Account Restrictions You understand that Legent Clearing may, in its sole discretion, refuse to accept or execute primary brokerage transactions on your behalf or restrict or prohibit the trading of securities on your account(s) with Legent Clearing or refuse to erase your securities transactions. 11.12. Legally Binding You hereby agree that this Agreement and all terms of this Agreement are binding on you and your estate, heirs, executors, administrators, personal representatives, successors and assigns. You agree that all Main Brokerage transactions will be conducted in accordance with your verbal or written instructions for your account(s).
You hereby waive any objection that such instruction has not been made in writing as required by the Fraud Act or any other similar law, rule or regulation. 13. Settlement Accounts In the event that your primary brokerage transactions are executed by your broker who has provided clearing of your account solely for clearing services, you agree that your broker and its employees are third party beneficiaries of this Agreement and that the terms of this Agreement, including, but not limited to, the arbitration and telephone conversation provisions, will apply to all matters between or between you, your broker and its employees and Legent Clearing and its employees. 4 LC12 07/05 7 For any arbitration exclusively between you and a broker for whom Legent Clearing acts as a clearing agent, this choice must be made by registered mail to that broker at its principal place of business. . . .
