Equity prime brokerage clients

For clients of Equity Prime Brokerage ('EQPB') that receive portfolio cross margin and / or consolidated margin statements there will be a number of changes:

• The current EQPB house initial margin calculation methodology will not change, however we will introduce a further margin calculation for SIMM and show these amounts on the EQPB consolidated margin statements.
• Eligible collateral will need to be posted by you to the segregated custody account to cover the IM requirement (net of any Threshold), and any further collateral needed to cover the remaining house initial margin would be posted to the EQPB account as per the current margin process.
• Note that segregating initial margin is likely to increase indebtedness and potential for rehypothecation or unsecured funding charges. The posting of SIMM by UBS to your custodian also increases the funding costs.
• In addition to the new legal documentation we will need to review your Prime Brokerage Agreements and other margin documentation to ensure that they are compliant with the regulations.

If you would like to discuss any points specific to EQPB then please contact your GFS Platform Sales representative.