Financial Licensing for Forex Businesses in Hong Kong

Posted by Jeremy Kang on Sep 8, 2021 4:17:11 PM

Hong Kong is one of the most business-friendly countries in the world. Low personal income tax along with low corporate tax makes it an appealing proposition for companies looking to set up a financial service, or broker business there. English is widely spoken given its colonial past and the time zone of GMT +8 happens to fall between London and New York, the biggest financial centers in the world.

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Topics: Thought Leadership, Institutional Trader

When is it time to move away from retail and become professional?

Posted by Richard Perona on Jun 18, 2021 1:31:03 PM

It is hard enough to produce a solid track record and to generate consistent profits as an FX trader, so why make it harder on yourself?

It’s my opinion that, for a long time, FX industry regulations were grossly inadequate, as the regulators seemed unprepared to protect its most vulnerable segment, the retail trader. When a novice trader opens a retail brokerage account, most, but not all, are unaware that their broker is on the other side of the trade and therefore 100% against them.

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Topics: Traders, Thought Leadership, Forex Brokerage, Forex B2B, Crypto Currency, Institutional Trader, Institutional Broker

Crypto mining impact

Posted by Raphael Ribeaucourt on Jun 2, 2021 11:08:45 AM

While crypto is starting to be a regular subject of discussion even amongst non crypto believers, the increased demand and interest in cryptocurrencies requires more computer power to verify transactions on the blockchain. Therefore an increasing need in crypto mining farms. But what is Crypto Mining and what challenges are in front of us ?

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Topics: Traders, Thought Leadership, Forex Brokerage, Forex B2B, Crypto Currency, Institutional Trader, Institutional Broker, Bitcoin

How does card payments/payment gateways works?

Posted by Shobin Mathew Simon on May 11, 2021 11:15:20 AM

A Payment Processor is a company that acts as a kind of mediator between the bank and the merchant, in a transaction. The payment ecosystem is complex with different terms and processes to get used to. Today I’m going to discuss various terms used in the online payments and a simple guide to the entire payment process. 

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Topics: Traders, Thought Leadership, Forex Brokerage, Forex B2B, Institutional Trader, Institutional Broker, Payment Gateway

The Archegos story - what FX brokers can learn from it?

Posted by Anya Aratovskaya on May 6, 2021 9:05:29 PM

The Archegos story sounds awfully familiar to anyone in the financial industry.

A well-educated Wall Street professional who started a career at a traditional financial corporation, networked, moved on to launch their own hedge fund, made mistakes (insider trading), paid fines to the SEC (44mln) in 2012, banned by MMT from trading in HK for 4 years in 2014 (insider trading), and restarted afresh with a new company (Family Office) that didn’t have the limitations of the previous company (contrary to a hedge fund, family offices are not required to register with the Securities and Exchange Commission and file regular reports). Not to mention, founded and run a charitable organization that reported almost $500 mln in assets on 2018 tax forms.

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Topics: Thought Leadership, Institutional Trader

Would FX Brokerage Be Able To Replicate Coinbase’s IPO Success?

Posted by Richard Perona on May 3, 2021 10:53:46 AM

Coinbase Background

Coinbase Global, Inc., known as Coinbase, is an American company that offers a cryptocurrency exchange platform and operates remotely - the first company of its kind without an official, physical headquarters. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam from a $150K start up incubator.

As of March 2021, Coinbase was the largest cryptocurrency exchange in the United States by trading volume and has almost 43 million verified users. (almost 4 times that of Robinhood).

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Topics: Traders, Industry Trends, Thought Leadership, Forex B2B, Institutional Trader, Institutional Broker, Coinbase

Banking for entry-level offshore FX Brokers

Posted by Anya Aratovskaya on Mar 25, 2021 1:31:27 PM

Banking and payment solutions for regulated FX Brokers are usually straightforward. I say "usually" as even FX brokers with recognized licenses can have a hard time finding suitable options in today's era of strict bank policies. Entry-level offshore FX brokers from St. Vincent, Marshall Islands and etc. are quite limited in how they can process incoming and outgoing payments, deposits and withdrawals.

This article will cover the most common payment solutions available for offshore FX Brokers as well as shed some light on what can be expected\ with each.

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Topics: Thought Leadership, Institutional Trader, Automatic Trading, FX Arbitrage

Arbitrage, HFT, Quant and other automatic trading strategies in FX

Posted by Natallia Hunik on Jul 31, 2020 4:21:36 PM

Historical Reference

The spot Forex market has grown significantly from the early 2000s due, in part, to the influx of algorithmic platforms. The rapid proliferation of information, as reflected in market prices, can present multiple arbitrage opportunities. With the advent of MT4, retail traders gained an opportunity to trade the market algorithmically resulting in many investors getting involved in FX trading and hedging.

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Topics: Thought Leadership, Institutional Trader, Automatic Trading, FX Arbitrage

FX Hedge Fund Startup Guide

Posted by Natallia Hunik on May 21, 2020 12:22:45 PM

As the world is facing global pandemic fears, investors around the world are still scrambling to figure out how to re-distribute their portfolios to minimize losses and diversify their investments.

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Topics: Thought Leadership, Institutional Trader, FX Jurisdictions, Hedge Fund

2020 FX industry events - make a wise decision on which to attend and how to generated the best ROI!

Posted by Yuhan Mo on Mar 31, 2020 11:11:14 AM

The upending of our normal daily lives by the Covid-19 virus has removed our ability to interact with industry colleagues during industry events and to share and debate our viewpoints. While the majority of us are staying at home during this pandemic, to help stop the spread of the virus, some event organizers have made changes to their schedules and have moved events into an online format. Are you perhaps curious as to which events to head to when the international quarantine is lifted and borders are reopened?
Check out this list of 2020 FX industry events compiled by Advanced Markets' research team with a daily re-check and update!


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Topics: Thought Leadership, FX Event List

The challenges of 100% uptime solution

Posted by Anya Aratovskaya on Jan 8, 2020 2:43:21 PM

The year of 2018 announced the era when DDoS attacks exceeded 1 terabyte on an individual attack basis. The definition of a “DDoS” (Distributed Denial-of Service) attack is “a malicious attempt to disrupt normal traffic of a targeted server, service or network by overwhelming the target with a flood of internet traffic”. The most famous instance was the attack on GitHub that caused downtime of 15-20 minutes[1]. Two days later, NETSCOUT Arbor confirmed a 1.7 Tbps DDoS attack but this one managed to fly under the radar as there were no reported service disruptions.

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Topics: Traders, Industry Trends, FX Liquidity, Forex Brokerage, Start Your Own Forex Brokerage, SYOB, Forex B2B, Regulation, MiFID, MiFID2, Wholesale FX, FX Liquidity Provider, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker, System Uptime

Moment of Truth: ESMA requires the publication of RTS27 & RTS28 reports

Posted by Natallia Hunik on Sep 25, 2019 8:06:52 AM

The inner workings of brokers have always been a mystery, a secret more closely guarded than the gates of hell it seems. That makes one wonder, why is it such a well-kept secret and what is there to hide? There are many underlying reasons:

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Topics: Traders, Industry Trends, FX Liquidity, Forex Brokerage, Start Your Own Forex Brokerage, SYOB, Forex B2B, Regulation, MiFID, MiFID2, Wholesale FX, FX Liquidity Provider, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

The Most Common Mistakes from New Fund Managers

Posted by Richard Perona on Aug 22, 2019 8:47:48 AM

Over the years, I’ve seen it all, the good, the bad and the ugly. I have tried to always keep my clients informed and have helped guide them along the way.
There have been a variety of responses, but in the end, my client knows that I am here to help and that I have their interests at heart. As far as new fund managers go, the reoccurring noticeable mistakes I have witnessed would be (in no particular order):

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Topics: Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, SYOB, FX Broker Startup, Leverage, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

Offering Clients Access to an International Team of FX Experts

Posted by Advanced Markets Team on Aug 1, 2019 9:11:40 AM

Advanced Markets is a company focused on bringing true Direct Market Access (DMA) liquidity, credit and technology solutions to the foreign exchange, energy, precious metals and CFD markets. Our firm has put together an international team of FX experts who are located all over the world. Our marketing team asked key members of this team to tell us a little more about their individual roles and responsibilities, the clients that the firm is servicing and their thoughts on how Advanced Markets is adapting to the fast changing FX landscape.

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Topics: Traders, FX Liquidity, Platforms & Technology, Company, Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Forex Marketing, Wholesale FX, FX Technology Provider, FX Liquidity Provider, Institutional Trader, Institutional Broker

Does Getting More Ticks Improve Your Algorithmic Trading Performance?

Posted by Yuhan Mo on Jun 7, 2019 8:27:04 AM

With high frequency trading estimated to account for more than 50% of the trading volume in the U.S. and more than 25% in Europe, the number of available price updates (ticks) per second has become an important criteria for FX Brokers, HFTs and Fund Managers when choosing a liquidity provider.[1]

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Topics: Traders, Platforms & Technology, Forex Brokerage, Start Your Own Forex Brokerage, Algo Trading, MT5, MT4, MetaTrader, Wholesale FX, FX Technology Provider, FX Liquidity Provider, Institutional Trader, Institutional Broker

Switching to Trading FX via a FIX API

Posted by Anya Aratovskaya on May 16, 2019 8:36:31 AM

FIX API has been a trending phrase amongst Forex professionals for the past decade. The technology has proven to be the fastest and one of the most secure ways to trade in FX.
A FIX API is an application programming interface (API) that uses FIX protocol. It connects FX Liquidity makers with takers. In our case, FX FIX API is a way to connect directly with a particular Liquidity Provider or aggregator.

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Topics: Traders, Industry Trends, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Forex B2B, MiFID2, Wholesale FX, FIX API, Retail Trader, Institutional Broker

Why Does Liquidity Differ Between “Prime of Prime’s”?

Posted by Richard Perona on Apr 24, 2019 8:33:02 AM

Recently at an FX conference, a developing fund manager and I crossed paths. After a few polite introductions, I quickly realized that, based on his audited returns, the new fund manager was proficient in trading the FX market. The detailed description of the fund’s fundamental and technical trading strategies was welcoming to hear.
After a few routine questions from the prospective client, the topic promptly turned to spreads and liquidity (my favorite). The fund manager was comparing pricing between FX brokers and asked why spreads are so contrasting amidst all of the firms in question.

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Topics: FX Liquidity, Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Forex B2B, Regulation, Wholesale FX, Institutional Trader, Institutional Broker

Does Your Liquidity Provider Really Cover Your Liability with Negative Balance Protection under ESMA?

Posted by Shobin Mathew Simon on Mar 14, 2019 8:50:19 AM

The European Securities and Markets Authority (ESMA) has implemented a range of measures intended to protect retail clients who are trading leveraged products, such as CFD’s.
The product intervention measures mandated by ESMA, under Article 40 of the Markets in Financial Instruments Regulation (MiFID II) include:

  1. Maximum leverage limits on the opening of a position by a retail client ranging from 30:1 down to 2:1.
  2. A margin closeout rule on a “per account” basis (at 50% of minimum required margin).
  3. Negative balance protection on a “per account” basis.
  4. A restriction on the incentives offered to trade CFDs. 
  5. A standardised risk warning, including the percentage of losses on a CFD provider’s retail investor book.
  6. Prohibition on the marketing, distribution or sale of binary options.
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Topics: Traders, FX Liquidity, Forex Brokerage, Start Your Own Forex Brokerage, SYOB, FX Broker Startup, Forex B2B, MiFID2, Wholesale FX, FX Liquidity Provider, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

2018: Short Cuts make Long Delays

Posted by Raphael Ribeaucourt on Feb 27, 2019 8:40:31 AM

2018 was a challenging year for retail FX brokerages with many of them being sold over the counter and others struggling to implement the new rules mandated by regulators.

What we can say is that 2018 was first and foremost a year of new regulation. Legal teams have been working hard to structure businesses differently and/or adapt to the new rules. Quiet contrary to the goals of the regulators’ goals, offshore is once more becoming the broker’s common strategy, especially to continue to offer high leverage to retail clients.

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Topics: Traders, Industry Trends, Thought Leadership, Forex Brokerage, Brokerage, Forex B2B, Regulation, MiFID, MiFID2, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

FX Brokerage Owner, What's Your Exit Strategy?

Posted by Natallia Hunik on Feb 12, 2019 11:11:01 AM
Planning an exit strategy for your FX brokerage is an important consideration, and one that certainly crosses an entrepreneur's mind as their business grows and evolves. Given that we currently seem to be in somewhat of a consolidation wave across the industry, this topic has been a popular one behind closed doors, as well as in the media.

Generally, compared to the software industry where we are looking at average multiples of 21-25 times EBIDTA, M&A transactions in the retail FX broker space are showing multiples of 5-10 times EBIDTA at most for the best deals we have seen recently.
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Topics: Traders, Company, Thought Leadership, Forex Brokerage, Forex B2B, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

Regulatory Jurisdictions for Startup FX Brokerages

Posted by Anya Aratovskaya on Dec 6, 2018 8:39:04 AM

The FX Landscape has changed dramatically this year, mostly due to the implementation of MiFID 2 regulations, and rulings by ESMA, in Europe alongside additional government scrutiny of the Chinese FX Market and the exposure of failed profit-sharing models. As a result, we are seeing quite a few licensed FX Brokers for sale, as well as acquisitions within the industry. Therefore, I want to provide you with a comprehensive comparison of regulatory jurisdictions in order to bring you up to speed with the latest trends.

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Topics: Forex Brokerage, Start Your Own Forex Brokerage, FX Broker Startup, Regulation, MiFID2, FX Jurisdictions

FIX API - How to Get One

Posted by Anya Aratovskaya on Oct 17, 2018 11:46:04 AM

Our marketing team gets countless emails from retail traders requesting demo versions of our FIX API.
Advanced Markets does not work directly with retail traders (the firm only deals with institutional clients), however, upon researching these requests further I came to the realization that this particular topic is not covered very well online.

Let’s say we have a retail trader, interested in trading via a FIX API, and who is looking for the broker that will be able to provide one.

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Topics: FX Technology Provider, FX Liquidity Provider, FIX API

Expert Tip: Crypto Currency Deposits & Anti-Money Laundering Procedures

Posted by Richard Perona on Sep 6, 2018 9:29:18 AM

Throughout my 18 years in the FX industry, AML (Anti-Money Laundering) / KYC (Know Your Client) training has been an annual requirement at the bank and broker level. Regulators have continually stressed the importance of AML / KYC training to help create an effective awareness of, and procedure for, financial crimes with the goal of protecting the firm and their clients. It is important to familiarize bank and financial institutions employees each year with anti-money laundering (AML) policies and procedures.

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Topics: Crypto Currency, Anti-Money Laundering (AML), Know Your Client (KYC), Financial Crime Protection

How to Verify Your UK FCA Broker's License?

Posted by Natallia Hunik on Aug 1, 2018 9:15:50 AM

In a world of constantly evolving regulations, licensing and compliance is of paramount importance. Many traders and brokers read and hear about regulation everywhere, but even with all of this awareness, I still often times come across corporate clients and institutional traders who are failing to conduct counterparty due diligence. 

The FX world has witnessed a lot of changes during last five years and there will be, undoubtedly, more to come. Mifid II is pushing for transparency, disclosure and fair trading conditions. 

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Topics: Forex Brokerage, Licensing, Regulation, UK FCA License, UK FCA Broker, UK FCA Register, UK FCA Registry

Traders’ Room and CRM for Your FX Brokerage: 101

Posted by Anya Aratovskaya on Jun 13, 2018 7:28:00 AM

As with most businesses, the operation of a Retail FX Brokerage involves a lot of moving parts that must be synced together to create an efficient and viable business.
These would include Legal (KYC, trading agreements, dispute management, regulatory reporting), Trading Platform Administration and Management, Liquidity and Risk Management Provisions, IB Management, Client Support, and, of course, Sales and Marketing.

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Topics: Thought Leadership, Start Your Own Forex Brokerage, SYOB, FX Broker Startup, Forex Marketing, Know Your Client (KYC)

What to Expect When Moving from Retail to Wholesale (Institutional) FX

Posted by Richard Perona on Apr 22, 2018 12:12:00 PM

I thought it would be useful to compile a short list of the main differences found when trading OTC (over-the-counter) FX with an STP (Straight Through Processing / No Dealing Desk) “Prime of Prime” and a Retail brokerage.

The differences can be categorized as follows:

- Vetting / Onboarding
- Netting vs Hedging
- Deposits
- Execution
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Topics: Traders, Thought Leadership, Forex Brokerage, Brokerage, Forex B2B, STP, Wholesale FX, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

How to Get an LEI Number if You Don’t Have a LOU (Local Operating Unit) in Your Country

Posted by Natallia Hunik on Apr 10, 2018 8:20:55 AM

The global push for greater transparency in financial markets continues to gain traction with top tier regulators now requiring that all entities, engaged in trading financial markets, report their LEI (Legal Entity Identifier) number to regulatory repositories.
In the European Union, this process started as of January 3rd, 2018 as per MIFID 2. In Australia, in accordance with ASIC Corporations (Derivative Transaction Reporting Exemption) Instrument 2015/844, relief from the requirement to report the entity Identifiers ends on September 30, 2018, which means that starting from September 30, 2018, entities regulated in Australia will need to report LEI numbers for their corporate clients.

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Topics: Traders, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Regulation, MiFID, MiFID2, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

Who Are the Real Beneficiaries of MIFID 2?

Posted by Advanced Markets Team on Jan 22, 2018 9:18:50 AM

I’m sure there aren’t many industry peers who have managed to escape the MIFID 2 avalanche this past year and, perhaps only the frenzy surrounding crypto currencies, ICO and Bitcoin comes close to the boiling hot MIFID 2 topic in 2017.

For the better half of 2017, brokers and trading firms, falling under the reach of MIFID 2, were very busy implementing the parameters and protocol needed in order for them to comply with the new regulatory standards.

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Topics: Traders, Forex Brokerage, Brokerage, Regulation, MiFID, MiFID2, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

MiFID 2: Are You a High Frequency Trader?

Posted by Richard Perona on Dec 6, 2017 6:16:01 AM

As January 3, 2018 approaches, FX industry participants are busy reading through the new financial laws of “Markets in Financial Instruments Directive” (MiFID 2) in an attempt to understand how these will affect them going forward.

Originally, MiFID was created following the 2008 financial crisis in an effort to standardize the regulatory disclosures for particular markets. MiFID 2 came along with a revised set of standards which will enforce transparency, enhance investor protection and expand reporting to regulators, effectively changing the way that Europe’s secondary markets function. The significance of these changes should not be underestimated as the regulatory expectations of higher quality data sets will most likely lead to more regulatory issues and fines.

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Topics: Traders, Forex Brokerage, Brokerage, Regulation, MiFID, MiFID2, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker

5 Ways To Hack FX Advertising in China

Posted by Yuhan Mo on Nov 8, 2017 7:07:39 AM

From social media strategy to content creation, what are the steps to take to reach the 1.4 billion-people Chinese market?

Penguin Intelligence, a research agency subsidy of Tencent, recently reported that as of Q4 2016, there were 889 million active users monthly. People are spending, on average, 66 minutes each day on WeChat with 57.22% of new WeChat contacts added for work-related matters and 6.04% service providers. Over 80% of users used WeChat group for work-related purposes with WeChat group becoming an important venue for business communications.
These statistics clearly indicate that WeChat is the potentially the most powerful platform through which to reach new leads and clients for your business.

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Topics: Company, Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, Forex B2B, Forex Marketing, Know Your Client (KYC)

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