Which of the following is required for institutions acting as prime brokers?
A) They must remain neutral and stay out of disputes between their customers.
B) They must rely on the execution venue to resolve disputes.
C) They must delegate the resolution of broken trades downstream to their clients.
D) They must take responsibility for the swift resolution of any disputes.

Question

Quizplus · Accepted Answer

Institutions acting as prime brokers are responsible for providing various services to their clients, including trade execution, financing, and custodial services. As a result, they must take responsibility for the swift resolution of any disputes that arise between their clients, as they are the primary point of contact for their clients in these matters. It is not sufficient for prime brokers to remain neutral or delegate the resolution of disputes downstream, as this would not fulfill their obligations to their clients. Additionally, relying on the execution venue to resolve disputes is not a requirement for prime brokers, as they must be able to handle such issues internally.

Which of the Following Is Required for Institutions Acting as Prime