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.Prime Services and Securities Lending
Led by
Andrew Loo
Level 2
49min
100% online and self-paced
Field of Study: Finance
Start LearningWhat you'll learn
Lesson
Multimedia
Exams
Files
Introduction
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
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
Qualified Assessment
This Course is Part of the Following Programs
Why stop here? Expand your skills and show your expertise with the professional certifications, specializations, and CPE credits you’re already on your way to earning.
Capital Markets & Securities Analyst (CMSA®) Certification
- Skills Learned Trading strategies used in the finance and capital markets
- Career Prep Work in capital markets, whether on the buy-side or the sell-side
What Our Members Say
A good course for Prime Services and Securities Lending
It is useful for all kinds of learners to learn the updated course of Prime Services and Securities Lending. Kwong Sang Yeung
Knowledgeable!
This course has been very helpful in providing more clarity on the services offered by prime brokers. Nkafu Njem
Prime Services and Securities Lending
Really enjoyed this module; a good simple high level overview of why Prime Services exist and the purpose mechanics of lending securities. Darren McLaughlin
Amazing
A great course to look after the Introduction to Hedge Fund Fundamentals. Manoj Kumar P
Frequently Asked Questions
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