IS Prime Risk Services, an affiliate of IS Prime, has acquired the assets of Think Liquidity, a provider of risk management focused technology and services – the price of the deal was not disclosed.
ISAM (Isam) has set up ISAM Capital Markets – a holding company consisting of IS Prime, IS Prime Hong Kong and IS Risk Analytics (ISRA).
The new group structure has been set up to provide a framework for future growth and further diversification.
Alex Lowe, managing partner at ISAM explains, “As we have evolved we needed a new corporate structure to accommodate our current and future plans. We now have offices in three jurisdictions and are a larger, more diverse organisation. Setting up a capital markets business was the next logical step for us as we continue to accelerate and broaden our offering.
Galen Stops takes a look at some of the potential risk concerns associated with the prime-of-prime model in FX.
I n a recent survey conducted by Profit & Loss 57.25% of respondents said that they think the trend towards more firms using prime-of-primes (PoPs) rather than traditional FX prime brokers (FXPBs) could increase the impact of a shock event.
This is in contrast to 27.48% who said that it won’t and 15.27% who think the impact of a shock event would be unaffected by this change. The logic underpinning this concern is based on the fact that risk is increasingly being pushed towards less well-capitalised institutions.
The traditional assumption in the FX industry is that accessing a bank prime broker is always preferable to using a prime-of-prime. Galen Stops speaks to service providers seeking to challenge that assumption.
“One thing that’s quite interesting is that in the mindset of the FX industry, there’s a certain hierarchy,” says Jonathan Brewer, managing director of IS Prime. “There’s basically an assumption that if you want to participate in the FX market, then the pinnacle provider that you should aim for is a tier one prime broker (PB), and then you should only go and look for a prime-of-prime if, for whatever reason, your face didn’t fit at a tier one PB.”
Although to some degree this hierarchy might be psychologically driven, there are also very valid reasons why market participants might prefer an FXPB to a prime-of-prime (PoP) offering.
Raj Sitlani, co-founder of IS Prime and managing director of ISAM Capital Markets, sat down with Profit & Loss in Shanghai to talk about the challenges associated with expanding into Asian FX markets and why technology remains the key differentiator for prime-of-primes.
Profit & Loss: So what’s your business focus in Asia?
Raj Sitlani: We have a large market share in Australia but, until recently, never truly had the manpower or the resources to crack the broader Asia market. However, there’s a very big opportunity in the region for us to provide our flagship product – which is a prime-of-prime service with aggregated FX liquidity – and so last year we set up a Hong Kong office through which we can build out our presence in North Asia and China.
IS Prime, part of ISAM Capital Markets, is launching an NDF and forward execution facility within its agency desk.
The firm says its agency execution service leverages its relationships with top tier banks whilst also utilising the technology resources of ISAM’s hedge fund business. It provides mid-tier and smaller banks, hedge funds and voice traders with an anonymous, customised liquidity solution with liquidity from the major market making banks, non-bank LPs and selected ECNs.
“The addition of NDFs and forwards in our agency execution business shows a steadfast commitment to doing all we can to meet our institutional clients’ growing demands,” says Raj Sitlani, managing partner, IS Prime.
Terry Gill has joined IS Prime’s agency execution team in a newly created institutional sales role. The firm recently announced the addition of NDFs and forwards to meet the demands of its institutional clients.
Gill joins from Edgewater Markets, where he held the post of director, he began his career 10 years ago as a money broker at Tullett Prebon. After Tulletts he moved into a sales role with Rosenthal Collins Group (RCG) before helping to launch Edgewater in 2013, following the business’ decision to break from RCG.