Client Pricing Strategy in Funding and Financing
Finadium
September 2025
Pricing clients in the funding and financing markets is a matter of art and skill: while quantitative models are involved, there is also discussion and a negotiation as both sides seek to find what are often cooperative solutions. Relations might be adversarial, but more often we see larger clients, prime brokers and trade services providers seek outcomes that work for both parties to agree on commissions, financing rates and post-trade activity.
How banks and service providers price clients continues to be complicated by two factors. First, regulated bank balance sheet requirements encourage firms toward trade types and strategies that minimize internal costs, which in some cases are more important to the bank than the actual trading commission. This can be a moving target or simply confusing, for example when regulators propose and then withdraw potential new rules.
Second, a smarter buy-side audience that invests in portfolio finance people, technology and processes means that product consumers are looking at counterparties as if the buy-side firm was a bank itself. By taking on familiar tools for risk management, counterparty evaluation and collateral optimization, buy-side firms become both more challenging clients and better users of bank and non-bank offerings.
In this report, we uncover strategies and the available data behind client pricing strategy across funding and financing markets. While most client prices do not fit into a neat bucket, there are available frameworks that can help speed up discussions and reach fair conclusions.
This report should be read by participants in funding, financing or post-trade services that are buying or selling products. This may be relevant for sales, securities finance and repo desks, and a range of investment professional types.
Table of Contents
- Executive Summary
- Frameworks Over Rules
- What Does a Smarter Buy-side Mean?
- Global Implications of US Treasury Repo Clearing
- – Sponsored Repo Pricing and Margin
- Securities Lending and Stock Loan
- – Agent Lenders and Beneficial Owners
- New Services and Client Types to Consider
- About Finadium LLC