BNY Mellon has ventured into the prime-of-prime space by offering a new product that leverages its existing pool of liquidity, collateral and funding capabilities and opens it up to institutional businesses.
BNY Mellon’s FXPB product is intended for a client segment that includes banks, hedge funds and other buy-side institutions, which are experiencing challenges accessing the wholesale foreign exchange price matching community via a prime brokerage model.
The increase in banking regulation, which mandates increased minimum levels of capital and increases in reporting expenses, has resulted in a lot of banks leaving the prime broking space.
The new service is expected to cater to clients who do not have an FX prime broker, or that need additional credit lines to access either liquidity or execution services. The exit of legacy players in the prime brokerage space will allow new offerings, such as BNY Mellon’s upcoming product, to rapidly gain customers and fill the void.
“FXPB is just one of a number of new services BNY Mellon Markets is introducing that will enable its clients to more efficiently access global currency markets,” says Michael Cooper, head of FXPB at BNY Mellon in London.
He continued: “BNY Mellon’s new service benefits from the combination of a highly-rated counterparty with the capacity of a market-leading custodial bank. It opens up access to multiple new sources of liquidity for new and existing clients. FXPB is the ideal tool for those looking to balance the challenges of the uncleared margin regime with the need to deliver better execution on behalf of their clients.”
Jason Vitale, COO of Foreign Exchange & Head of Client Execution Services at BNY Mellon Markets, added: “We’re launching a traditional prime brokerage service with a twist. By leveraging BNY Mellon’s leadership in collateral management, funding and liquidity, clients will benefit from a fully-integrated and complete FX service.”