At Clear Street, they’re enabling a technology-first experience for prime brokerage via their cloud-based platform.
In 2019, Clear Street began servicing prime brokerage clients in U.S. equities and options “on their proprietary clearing, settlement, and custody platform.”
Since then, Clear Street have reportedly “added execution, securities lending, repo, margin financing, and more.”
Their mission is to “build modern infrastructure for capital markets, with the goal of creating one platform to serve all investor types across all asset classes globally. In keeping with that mission, they’re excited to share that they have expanded their asset class capabilities to include fixed-income securities.”
This expansion is possible “because of their single-source-of-truth prime brokerage platform, which uses cloud-native, event-driven, and horizontally scalable technology.”
While it can take other prime brokers years to add new asset classes, they have “built fixed-income capabilities on our platform in just six months.”
The complex legacy tech environments “at other prime brokers often consist of a patchwork of systems that integrate poorly and require extensive reconciliations.”
In contrast, Clear Street’s platform acts “as a cohesive whole, consisting of hundreds of microservices that can seamlessly communicate via a library of APIs (application programming interfaces).”
Launching support for fixed-income in just six months required coordination “across various business and technology teams.”
Nearly every engineering group – reference data, clearing and settlement, custody, risk, and securities finance – “needed to add new capabilities while working in parallel.”
For example, the risk engineering team “was building models for convertible bond risk even before the reference data team finalized their data inputs for such bonds.”
This is possible because of their API-first approach. They don’t need to “wait for teams to finalize their work and provide concrete implementations for all APIs to begin developing dependent components.”
They were confident that if they “created durable API contracts, all the pieces would click into place, like a giant jigsaw puzzle.”
The microservices-based architecture also helped them roll out “a change of this magnitude.”
In the last month alone, they had “deployed well over 100 production releases to prepare for the launch.” The success of this project is a testament to both the deep expertise of our subject matter experts “with decades of experience in financial services and the strength of our engineering teams.”
They’re now serving dedicated fixed-income clients and multi-strategy investment managers who “trade corporate bonds, convertibles, and treasuries.”
Their advantage goes beyond their technology. Bank regulators recently “announced extensive regulatory proposals that would raise capital requirements by an aggregate 16 percent (i). Fixed-income securities, particularly convertible bonds, increase a bank’s risk-weighted assets (RWAs).”
As capital adequacy ratios increase, higher RWAs mean “a lower return on equity for banks.”
As an independent prime broker, Clear Street has “more flexibility to take on clients left behind by legacy banks burdened by capital constraints.”
They have the flexibility to finance clients’ strategies and “grow their businesses with the support of more than $700 million in capital.”
While they continue to grow Clear Street’s services, they’re up “against established players working with decades-old technology that struggles to keep up with the changing prime brokerage landscape.”
Earlier this year, they had “acquired BASIS, a cloud-native futures clearing platform, to accelerate our development in the futures space and further our plans to rapidly build support for more asset classes, geographies, and investor types.”