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. 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.
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
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:
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
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):
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.
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
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.
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
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.
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.
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
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:
- Maximum leverage limits on the opening of a position by a retail client ranging from 30:1 down to 2:1.
- A margin closeout rule on a “per account” basis (at 50% of minimum required margin).
- Negative balance protection on a “per account” basis.
- A restriction on the incentives offered to trade CFDs.
- A standardised risk warning, including the percentage of losses on a CFD provider’s retail investor book.
- Prohibition on the marketing, distribution or sale of binary options.
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
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.
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.
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.
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
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.
by Natallia Hunik, Global Head of Sales at Advanced Markets & Fortex, Inc. and Ron Finberg, Head of Business Development at Cappitech.
MiFID II has been the focal point of many discussions in the European financial world recently. We have previously focused our attention on several of the main aspects of this upcoming regulation, such as Best Execution Policy, Reporting Framework Updates and Tied Agents Designation.
In this article, I would like to elaborate further on some of the reporting mechanisms that are being put in place by one of the world’s most respected financial regulators, the U.K’s Financial Conduct Authority (FCA).
MAM is an acronym for Multi Account Manager, a plugin originally designed for the Meta Trader 4 Platform to allow the proportional (or any set) profit and loss distribution from Fund Manager (or Master) to Investors (or Sub Accounts).
The Master Account serves as the primary (and the only real) trading account, and sub accounts receive the results of the actions performed on the Master Account (only proportional COPIES of the original trades).
Best execution policy under MiFID adopts a multi-faceted approach that addresses, amongst other things, quality of execution, trading conditions extended to clients and the counterparty selection process. It also provides directions and guidelines on how best execution can be achieved.
The execution policy, set forth in MiFID II rests on several main pillars and I will briefly describe my findings on these below.
Topics: Traders, FX Liquidity, Forex Brokerage, Start Your Own Forex Brokerage, Regulation, MiFID, MiFID2, FX Liquidity Provider, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker
With the deadline for MiFID II implementation fast approaching, a lot of confusion and uncertainty still exists within the FX Industry.
MiFID II regulation is divided into several distinct rule sets with the legislation applying to a broad range of financial industry players, those who provide investment services, such as investment banks, portfolio managers and brokers, and intermediaries such as inter-dealer brokers and market-makers.
The main objective of MiFID II is to ensure the fair, effective and safe operation of financial markets. Failure to comply with the directive could result in significant fines.
Welcome to a financial world, full of mysterious acronyms. LEI, CASS, ECP, EMIR, MiFIR, MTF, OTF… This industry just loves acronyms and MiFID II just gave us a whole lot of new ones to work with.
One that I have started hearing more often is the LEI number and it relates directly to the requirements embedded in the upcoming MiFID II directive. The following article will hopefully give answers to these much-asked questions, what is an LEI? Who needs one? Why it is required? How do I get one?
MiFID II, the “Markets in Financial Instruments Directive”, is legislation that is set to be implemented across the European Union on January 3rd, 2018.
As this due date approaches, many market participants are scrambling to implement changes to hopefully comply with the new rules. Some, on the other hand, prefer to procrastinate as long as possible in the hope of getting further clarity on this pending regulation.
Regardless, what is clear at this point is that there are a number of significant changes that are coming down the pipe for the FX brokerages.
Topics: Traders, Forex Brokerage, Prime of Prime, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Licensing, Regulation, STP, MiFID, MiFID2, Institutional Trader, Institutional Broker
While some industry sources are arguing whether or not MiFID II will dramatically affect the FX industry, most FCA and CySEC licensed FX brokers are rapidly adjusting policies in order to comply with the new requirements.
One of the key changes of MiFID II is an implementation of the term “best execution” and a directive to ensure “All Sufficient steps” (Article 64 -4) are in place to support that.
FX is the most liquid market in the world with over 5 trillion USD in daily turnover, and 1.6 trillion USD in OTC spot transactions executed each day on average. Volatility makes it an attractive investment vehicle for many traders around the world, institutional and retail.
Retail FX has been around for longer than 2 decades now, but we have yet to see the industry reach a mature state.
Two decades might be just an infancy stage for an asset class, one would say, and would be right.
Regulatory frameworks in many countries are not greatly fine-tuned to deal with FX or are not encompassing FX at all.
Topics: Traders, Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Regulation, STP, Leverage, UK FCA Broker, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker
More than a few times over the past year, I have come across instances where companies have thought that they were paying for legitimate ASIC licenses when, in reality, that was not the case. There appears to be several “light fingered” agents operating in the market (particularly, in the Asia region) who are “selling ASIC licenses” at a discounted price.
As we all know, there is no such a thing as free lunch. The use of words such as “discounted” and “fast-track”, with regard to obtaining a license in a reputable regulatory jurisdiction, should have immediately raised your eyebrows.
Yesterday, I got an email from one of my old contacts thanking me for persuading him not to go into the retail FX brokerage business last year. The email was sent from the corporate domain of his new business venture, one that is apparently doing well with only a 30% involvement with the FX industry.
His experience has inspired me to write a short article that can serve as a wake-up call to anyone contemplating starting their own FX Brokerage.
There are several ways that an STP brokerage can make a profit. The broker may either charge their clients a commission ($X per $million), apply a markup to the price feed, or perhaps a combination of both.
In MT4, the commission charged to the client is typically set in deposit currency per lot ( In this article, we will be using US Dollars as deposit currency for an easy and clear explanation).
An STP brokerage can also choose to charge their clients a markup, which will be added into spread that their retail clients see. Markup is normally defined as points added per lot. Markup is usually invisible to your clients and tends to be more flexible as you have the ability to adjust the markup according to market conditions.
Topics: Traders, FX Liquidity, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, Forex B2B, STP, MT4, Wholesale FX, FX Liquidity Provider, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker
Topics: Traders, Thought Leadership, Forex Brokerage, Start Your Own Forex Brokerage, Brokerage, SYOB, FX Broker Startup, Forex B2B, Retail Trader, Retail Broker, Institutional Trader, Institutional Broker
Traditionally, December is the month when the majority of FX professionals take some well-deserved time off. Fund Managers are avoiding any major market participation that could negatively impact annual return statistics; bank employees are trying to use up their remaining vacation time, and the overall the spirit of holidays (Christmas, Hanukkah, Omisoka, Kwanzaa, and many others) makes December the perfect time to relax ahead of the January hype.
Topics: FX Liquidity, Platforms & Technology, Start Your Own Forex Brokerage, SYOB, FX Broker Startup, STP, MT5, MT4, Wholesale FX, FX Technology Provider, FX Liquidity Provider, Institutional Trader, Institutional Broker
It’s no secret that we live in a technological world; a world where mobile has long become the prevalent vehicle for communication and business for all of us. Mobile now dominates the world’s search queries and mobile trading is reported to be responsible for around 30% of all trading at FX brokerages, with even higher percentages in Asia. As the world is adjusts to this new reality, the release of mobile apps, for its products, is now a must for FX brokerages and platform providers alike.
When someone starts thinking about opening a Forex brokerage their mind immediately fills with question after question. Which regulatory jurisdiction should I choose? How much capital do I need? What kind of license do I need? How do I get pricing? Where do I base the operation? The “office” / location question is usually the last that comes to mind but the choices made here can determine whether a business succeeds or fails. The following 5 points are therefore worth considering before making any decisions on your brokerage startup:
FIX (Financial Information Exchange) API (application programming interface) is a highly scalable electronic communication protocol to facilitate the real-time exchange of information related to financial markets. It has become the de facto standard method of pre-trade, trade and post-trade communication. Market participants including banks, hedge funds, prime brokers and “prime of primes” utilize FIX for their own trading needs or to connect directly to clients.
To give you an indication as to how popular FIX is: the FIX Trader Community has around 110 000 registered members and 275 corporate members (including Goldman Sachs, Barclays, Morgan Stanley and so on).
Topics: Platforms & Technology, Thought Leadership, Start Your Own Forex Brokerage, SYOB, FX Broker Startup, Forex B2B, FX Technology Provider, FX Liquidity Provider, FIX API, Institutional Trader, Institutional Broker
The world of online Retail FX has become increasingly competitive and congested but, regardless, the industry remains extremely attractive to investors, insiders and entrepreneurs alike. One key factor adding to the attraction is the ease by which a person can actually start their own brokerage. In past years, starting a brokerage normally required expert technology and market knowledge combined with a significant amount of free capital but today, advances in technology and an increase in the options available for regulatory licenses have greatly reduced the cost and the “time-to-market”.
I, along with my institutional FX Team at Advanced Markets and Fortex, am dealing with FX brokers who may be in search of liquidity, technology solutions of all kinds, infrastructure enhancements or sometimes just a price feed that is stable and reliable on a daily basis. We have seen it all from novice brokers that need everything explained from A to Z, medium-sized price-conscious brokers that are trying to bypass pre-qualifications and over-state their volume figures to get better deals to larger brokers asking us to fill out lengthy RFPs (Request for Proposal) while the work on selecting a new liquidity partner.