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Scotia Capital
Scotia has come a long way since it began to service Canadian hedge fund managers at the turn of the century . The Canadian stock loan desks of a decade ago have evolved into full service equity finance operations in New York , London and Singapore , and the bank has built a successful synthetics prime brokerage business in all three regions on the back of the Daiwa acquisition of 2011 . Managers like Scotia as a counterparty – Bank of Nova Scotia has an A + credit rating – but , as these results indicate , the bank has also built strong relationships with a sizeable client base . It is disciplined too about what new business it on-boards . The scores for sales and marketing suggest the clients fit the services : They think Scotia prices openly and competitively and puts the right value on their portfolios . A client service model based on a single point of contact from the outset earns its reward in comments as well as scores . “ Client service at Scotia is very strong ,” writes one client . “ They are responsive and dependable for all issues .” A second says , “ Scotia is always supportive and helpful . The staff respond to our inquires and requests [ in a ] timely [ manner ].” A third says the “ people are very pro-active in helping us .” On the financing side , Scotia applies the same approach , in particular by customising swaps to individual client needs , but scores and comments suggest the bank could do more to help clients cut costs . “ Would like to see cross margining vs . the PB ,” writes one . In the associated field of securities financing , clients have noticed an emphasis on technology , especially by the stock borrowing desks , which are still strong in Canadian securities . “ Excellent improvements made in automation and tech in the stock loan space ,” writes a client . But technology , where the bank has relied on vendor systems ( notably CoreOne Technologies ) to supplement its own platforms , is not the strongest area at Scotia . “ Good portal , can do some improvements ,” says one client , while a second says , “ Additional investment in a secure , modern document and data exchange would be helpful .” Others see Scotia is already on the case , with several infrastructure projects in hand to ensure the business can scale without difficulty . “ We have seen Scotia investing in technology with new reports and systems upgrades over the last several years ,” writes one respondent . “ There are functions and features that can be further automated to reduce manual processing ( e . g . withholding tax for multi-jurisdictions ).” Another is “ happy to see Scotia continue to invest in technology .” Any technological shortcomings have clearly not hampered operations , where a model that aligns settlement staff with settlement location works well for clients . “ Personnel are always concerned with the correct settlement of trades and monitors that all funds have proper balances ,” says one . “ This is highly appreciated by our firm .” Clients add that they “ do not experience any inefficiencies or delays ,” and that operations staff are “ very capable .” Even in capital introductions , Scotia manages to clear the survey benchmark comfortably . One client rated the bank specifically because “ they have been providing excellent capital introductions to our teams .” The fact that not every capital-hungry client has enjoyed the same access (“ It is not good at capital introduction
– they never help us ”) is a reminder of how hard it is to please in capital introductions , but also of how disciplined Scotia is in introducing clients it believes it can help to investors who can benefit from their investment strategy , especially in Canada .
30 %
By size
15 %
54 %
Weighted average scores
PROFILE OF RESPONDENTS
Large Medium Small
Weighted average scores by service area Service area
By location
13 %
87 %
2016 2017 2018 5.77 6.13 6.06
Weighted average score
Capital introductions 5.71 6.3 % Client service 6.30 4.7 % Consulting N / A N / A Operations 6.46 8.2 % Technology 5.69 1.7 % Product development 5.25 -3.8 % Risk management 6.12 10.0 % Asset safety 6.13 6.9 % Sales and marketing 6.46 5.3 % Trading and execution 5.82 -0.5 % Delta 1 , swaps and financing 6.05 5.8 % Stock borrowing and lending 6.24 4.5 % Foreign exchange prime brokerage 6.33 11.7 % Fixed income 6.21 7.7 % OTC clearing 5.78 -1.2 % Listed derivatives 5.32 -9.7 % Total 6.06 4.6 %
Americas Europe and Middle East Asia
+/ - the global average
The Hedge Fund Annual 2018 globalcustodian . com 89