BCS Global Markets (BCS GM) an independent securities broker on the Russian Exchange, has launched a new trading product – a new synthetic prime brokerage offering professional and institutional investors simplified access to the Russian capital markets.
The synthetic prime platform, which BCS plans to expand into a global multi-asset platform, can be used by institutions of all sizes including hedge funds which have been viewed as too small to work with by other prime brokerages.
BCS says trading Russian instruments has traditionally been difficult from a regulatory, settlement and hedging perspective, but the new platform has been designed to overcome these challenges, including challenges for US institutions, who are unable to trade Moscow Exchange-listed derivatives directly as this market is non CFTC recognised. BCS’ synthetic prime brokerage offering can be US dollar denominated, enabling any professional investment vehicle access to Russia without local settlement arrangements or rouble accounts.
The platform is already being used by major institutions and BCS says there is growing interest in the product from hedge funds, proprietary trading firms and investment banks who are either looking to trade Russian assets for the first time or to benefit from trading with Russia in US denomination.
Tim Bevan, Global Head of Prime BCS Global Markets and Co-CEO BCS UK, says: “Since 2013, we’ve been attracting some of the most sophisticated institutions in the world who want to trade Russian strategies through our specialist prime brokerage, so our core infrastructure in terms of technology, client support and risk management is already in place.”
“We believe that the Synthetic Prime offering can become a major international business. We’re already seeing a lot of demand from small and medium sized hedge funds which are underserved by larger international prime brokerages – we’re confident that this is a highly scalable model.”
BCS Global Markets also recently announced its plans to develop a new integrated payment and investment model after obtaining its transaction banking license which will also be a core function across BCS’ growing Investment Banking capability. This will enable high net worth, corporate and institutional clients who satisfy eligibility criteria to conduct international business and pay or accept payments from third parties across several currencies, in line with the increasingly global footprint of BCS.