FX prime brokers jockey for buy-side flows as IM phase 6 looms
Banks say concentrating trades through single dealer would ease paperwork logjam for asset managers
Foreign exchange prime brokers are reporting an uptick in interest from asset managers looking to avoid a documentation crunch when the final phase of initial margin rules kicks in next year.
An estimated 800 mainly buy-side entities will be required to post initial margin on non-cleared derivatives – including FX options and non-deliverable forwards – starting from September 1, 2022. Observers have long warned of a bottleneck in legal paperwork as firms scramble to open custody and collateral
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