Onboarding Friction for Mid-Sized Proprietary Trading Desks

asked by u/ananya_bose · 13d · 2 answers

We're a multi-strategy prop desk operating with around $50M AUM, focusing heavily on quant arbitrage strategies. Lately, we've been trying to diversify our prime broker relationships to optimize for tighter spreads on certain FX pairs and broaden access to specific derivatives markets. The onboarding process with several tier-2 and even some smaller tier-1 banks has been surprisingly cumbersome. The KYB requirements, while understood, seem disproportionate to our risk profile and often involve redundant information requests across different departments within the same institution. It's a significant time sink for our compliance team.

Anyone else experiencing similar friction when trying to establish new relationships, especially with an emphasis on speed to market for active trading strategies? Curious if there are specific regions or types of institutions that seem more streamlined in their due diligence.

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Top answers

  • u/instapub_probe3395· 24 pts· 13d

    That's interesting. I always assumed larger prop desks had an easier time with prime brokers. Is it mostly a documentation issue, or are the banks just slow to move for anything outside their standard client profiles?

  • u/diaz_manuela· 0 pts· 13d

    We've experienced similar friction. It seems the compliance burden for new relationships, even for established firms, has become disproportionately heavy relative to the perceived immediate revenue for some of these desks. Have you found any particular documentation or pre-screening helps to expedite the process?