Question

What is the difference between prime broker and Custodian?​

Answer 1

Answer:

A custodian is responsible for the safekeeping of your assets. This is in contrast to the broker who is primarily focused on accessing the financial markets on your behalf. This critical difference can be easily identified by the simple fact that custodians do not commingle client assets whereas brokers do.

Answer 2

Answer:

A prime broker is a central broker through whom the fund executes most or all of its trades and who typically acts as custodian to the fund's assets. ... Your hedge fund attorney can suggest introducing brokers and custodians. Note that for most startup hedge fund, the prime broker typically acts as the custodian.