Example 2: Broker-dealer as SFT intermediary In this second example, the ultimate demand to own the corporate bond comes not from the dealer firm, but from one of its prime brokerage customers – say, a hedge fund.
Moreover, the hedge fund cannot borrow directly from the money market fund sector in the triparty repo market, because the money funds are not sufficiently knowledgeable about the hedge fund to be comfortable taking it on as a counterparty.