Establishing a Desk Relationship Before You Need One
Onboarding takes days when nothing depends on it and weeks when something does.
A desk relationship is worth having before the position is large enough to need one, because onboarding under time pressure is where people accept worse terms. A provider publishing its terms makes a long-term decision checkable, and a regulated crypto liquidity provider does.
What onboarding involves
The standard entity or individual pack: identity, address, source of funds, and for a company, beneficial ownership to natural persons.
Three days to two weeks, depending on structure and on the desk’s process.
The five questions to ask first
Which legal entity will we contract with, and does it hold an authorisation we can verify on a register.
What settlement structures do you support as standing arrangements.
What size will you quote without hesitation in the assets we hold.
Has a client ever had a settlement fail, and how was it handled.
Do you onboard clients in our jurisdiction with our structure.
What the answers tell you
A desk that names a size and describes settlement mechanics as standing arrangements has done this at volume.
One that proposes to agree settlement per trade is asking you to negotiate protection at the same moment you are negotiating price, which is the wrong order. Past a certain balance the arrangement changes, and a provider serving funds and family offices becomes the relevant option.
One that cannot answer the jurisdiction question at the start will discover the problem after two weeks of document exchange.
The settlement structure
For a first trade, settlement through a regulated intermediary holding both legs.
The fee is small relative to the amount and it converts an unassessable risk into a manageable one.
Agree it before agreeing a price, and hold it constant regardless of size. A counterparty who accepts it small and objects large has explained the arrangement.
Why two rather than one
During volatile periods a desk may widen considerably or decline your size entirely, which is a legitimate risk decision on their part and leaves you without a route.
A second relationship also improves pricing, because a desk quoting in competition prices differently from one quoting alone. Coverage decides more than most features do, and a crypto exchange with published fees publishes its country list.
The timing
Open both while nothing depends on it.
Under pressure the onboarding takes longer, the terms are worse, and the alternative of waiting is not available.
This is a personal account of holding through market cycles. It describes what one person did and why. It is not a recommendation, and past cycles do not predict future ones.