Goldman Sachs, Morgan Stanley and Bear Stearns are the Big Three when it comes to prime brokerage. But hedge funds are a savvy bunch, skilled at wrangling sweeter, lower-cost services. The likes of Bank of America, Citigroup and Lehman Brothers are angling to take some market share; Lehman has said publicly that it is experiencing some success. Evidence of a market war is forming; the units that include the prime brokerage business show signs of reduced commissions. Of course, overall demand may be slightly down as top hedge funds scale back their risk. In any case, this market is of incredible importance now. The competition seems to be just beginning.

For more on prime brokers:
- Here's a MarketWatch article [1]