FXPB fee jump unlikely, say dealers

HSBC and NatWest say client charges unlikely to rise significantly despite new margin costs

Marcus Butt - web.jpg
Marcus Butt: an increase in costs by a factor of 31 “just doesn’t make any sense”

Two foreign exchange prime brokers (FXPBs) have agreed with Citi’s recent claims that costs for the business will rise, but they cast doubt on whether client fees would actually increase by the claimed 31 times for the business to be sustainable.

In an April white paper, Citi’s FXPB said that kind of fee increase for a non-deliverable forward would be necessary for the broker just to break even on the trade.

“In that particular scenario, yes, there will be an increase in costs, I think,” said

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