Prime brokerage
Plain definition. Prime brokerage is a package of services for large active investors, including clearing, custody, financing and securities lending, in which the prime broker finances the client’s trades.
Technical definition. The Basel III Liquidity Coverage Ratio defines prime brokerage as “a package of services offered to large active investors,” covering clearing, settlement and custody; consolidated reporting; financing (margin, repo or synthetic); securities lending; capital introduction; and risk analytics. The customer keeps its funds and securities in an account with the prime broker, which clears and finances trades the customer has executed through one or more registered broker-dealers. The prime broker may act as principal, and the prime brokerage agreement gives it the right to use custody assets for its own accounts, so the customer is exposed to and dependent on the prime broker’s solvency.
On this site
On this site, Prime brokerage comes up in What is Ripple Prime, and how big is it?, Do Ripple’s trillion-dollar figures mean trillions are flowing into XRP?, Do market makers need to own all the XRP liquidity they provide?, Does XRP meet the tests for institutional collateral? and What kinds of XRP credit exist today?.
Source
Northern Trust STATE STREET. (federalreserve.gov), read October 1, 2026.