EBS's client platforms
EBS Prime is aimed at smaller banks which, because of credit rating, limited credit facilities or other factors, either cannot use EBS at all or could not reap the full benefits. "For example, a bank might run out of credit during the trading day, especially when the non-farm payroll number comes out, or when the Federal Open Market Committee issues its interest-rate statement," says James Sinclair, head of research and strategy for EBS. Such banks could also not get the best price. They see the best price available to the best credits, but can only trade on the price available to them given their credit standing with the counterparty.
EBS Prime was designed to solve that by enabling such banks to set up credit arrangements with another, larger, bank's prime brokerage department which would then lend its credit to the bank, and its name for the purposes of trading on EBS.
The EBS Prime bank customer would then be able to get the prime bank's better pricing. "This could reduce a bank's bid-ask spread from, say, 5 pips to 1 pip," says Jodi Burns, senior analyst at research firm Celent Communications. EBS charges its regular flat fee per trade all participants pay, regardless of credit, and the prime broker charges its fee on top.