Prime broker
Definition
This refers to a large financial institution that offers services to large institutional clients or hedge funds. It is possible for a firm to have more than one prime broker. Importantly, the firm is not obligated to all of its business through the prime broker. The prime broker offers a variety of services which includes but is not limited to execution of trades, settlement, financing and custody.
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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University
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