Andrew Loo – Prime Services and Securities Lending – CFI Education

Description

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Andrew Loo – Prime Services and Securities Lending – CFI Education
Explore prime services—an important part of any investment bank—in this course

See how prime services is an integral part of the service an investment bank provides to hedge funds
Learn about how prime services make money
Understand the process of shorting stocks and borrowing them to cover

Overview

Prime Services and Securities Lending Course Overview
The Prime Services and Securities Lending course aims to guide you to understand how the prime services team provides specialized services to help hedge funds make money and how securities lenders facilitate the shorting of stocks. Once you get started, you will comprehend how prime services (i.e., prime brokers) attracts investors, provides leverage, maintains margin requirements, performs clearing and settlement functions, offers custodial services, and produces real-time reporting for their hedge fund clients. Next, you will cover the securities lending function, where you will understand what securities lending is and identify key differences between short-sellers, stock lenders, and long-sellers. You will recognize how and why market participants may ‘short’ stocks. As short-selling is crucial to the stock market, we will analyze short-selling activity using multiple short equity metrics such as short interest and short interest ratio on Refinitiv Workspace screen.
Finally, as mentioned earlier, securities lenders are essential to facilitate short selling. You will examine securities lending transactions using examples with a hedge fund manager who is bearish on a stock and wants to borrow a stock to short, a securities lender who will facilitate the borrow, and a long-only asset manager who will lend the stock. In this process, you will also see the distribution of borrow fees and various security lender models.
Prime Services and Securities Lending Learning Objectives
By the end of this course, you will be able to:Understand what prime services is and how it fits within a bank

Describe the range of prime services activities
Recognize how and why market participants may ‘short’ stocks
Comprehend how securities lending works and who are the market participants
Calculate the cash flows involved in securities lending

Who Should Take This Course?
This Prime Services and Securities Lending course is perfect for anyone looking to build a complete understanding of capital markets. This course is designed to help those interested in careers in prime services, securities lending, hedge funds, portfolio management, and other sell-side trading careers. This course explores concepts useful for beginner and intermediate level capital markets professionals or business and finance students seeking to better understand securities lending transactions.
What you’ll learn
Introduction

Introduction Free Preview
Download Course Presentation

Prime Services

What Is Prime Services Free Preview
Interactive Exercise 1 Free Preview
Capital Introduction Free Preview
Trade Execution, Clearing, and Settlement Services Free Preview
Trade Execution, Clearing, and Settlement Services – Executing Broker
Interaction Between Portfolio Manager, Executing Broker, and Prime Broker
Interactive Exercise 2
Margin Maintenance – Prime Broker Give Up
Margin Maintenance – Prime Broker Give Up – An Example
Financing – The Hedge Fund Balance Sheet
Financing – Debt Financing in the Form of Margin Loans
Interactive Exercise 3
Custodian – Asset Safekeeping (Long Assets)
Custodian – Source Short Assets
Custodian – Managing Margins
Custodian – Managing Margins – Bilateral vs. Cleared Derivatives
Interactive Exercise 4
Reporting
How Do Prime Brokers Make Money
Interactive Exercise 5

Midway Check-In

Midway Check-In

Securities Lending

What Is Securities Lending
What Is Securities Lending – Short Seller vs. Stock Lender
What Is Securities Lending – Short Seller vs. Long Seller
Interactive Exercise 6
Short Interest – Refinitiv Workspace Screen
Short Equity Metrics
Short Selling Example
Short Selling Risks
Interactive Exercise 7
Short Selling Risks – Short-Squeeze – GameStop Example
Who Shorts Stocks – Asset Manager vs. Hedge Fund Manager
Why Do Short Sellers Need to Borrow Stocks – DTCC’s Role
Interactive Exercise 8
Why Do Short Sellers Need to Borrow Stocks – Covered vs. Naked Short
Why Short Sellers Need to Borrow Stocks – Good vs. Bad Fails
Other Reasons to Borrow Stocks
Interactive Exercise 9
What Is a Securities Lender – Example of Securities Lending (Part 1)
What Is a Securities Lender – Borrow Fee to Security Lender
What Is a Securities Lender – Example of Securities Lending (Part 2)
What Is a Securities Lender – Distribution of Borrowing Fees
Securities Lending Models (Part 1)
Securities Lending Models (Part 2)
Securities Lender Fee Models
Securities Lending Market Overview
Securities Lending Market Overview – Govt. Bonds vs. Equities
Interactive Exercise 10

Course Summary

Outro

Qualified Assessment

Qualified Assessment

What our students say
“This let’s you go extra mile

This special course let’s you go extra mile in understanding capital market related products and services and it also let you understand how far hedge fund and asset managers extend their profit margin.”

Atinafu Asefa
“Interesting

Explicit”

Efomaegbulem Ebonka