RETAIL e-FX PROVIDER
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global regulations. Few MTP firms operate in just one jurisdiction now, so a global perspective by all parties influencing strategic decisions is necessary.” Tom Higgins, CEO at Gold-i, agrees: “Regulatory compliance is incredibly complicated so it is always worth going to an expert in the region that you are targeting. Gold-i has partnered with a number of compliance consultants who specialise in different regulatory regimes to address this need.”
Business models
On how firms can tailor their trading technology architectures to the specific retail FX business models they will be using, Shmuely states that this is now straightforward. “Tey simply need to find a provider that offers trading technology that allows for the architecture to be designed and built specifically according to the brokers’ business models, and which is able to support any variation of business model in the one central solution. Tis gives brokers the flexibility needed in order to operate their brokerage firms how they choose, according to their specific business models,”
Shmuely continues. “With a team of experts, Leverate assists brokers with configuring hedging strategies in
the Leverate Risk Management System, and the team works individually with each broker to configure the settings of the brokerage by arranging groups for market making and STP, accordingly.”
Leahy says his company focuses on the MetaQuotes Platforms for clients: “Within MT4 and MT5 there are ways to segregate client accounts that allow brokers to offer different pricing models to clients on the front end, and handle client orders differently on the back end. Some jurisdictions now require proof from the brokers that they are STP’ing each client order. At CMAP we use oneZero Financial Liquidity Bridges that give our clients full reporting capabilities, such as detailing client orders into the MetaQuotes platforms, sending orders to the execution platforms, and matching them with executions and responding messages back into the Metaquotes platforms.”
While Ralich says offering a platform like MT4 is an easy way to attract clients, it can also be more difficult to differentiate a MetaTrader offering from other brokers because of its wide usage. However, he adds: “Offering multiple platforms and trading facilities (such as web based, mobile, and more,) to clients is ideal from a sales standpoint, but it can be difficult to risk manage risk and administrate clients across multiple platforms. At oneZero, we work with our brokerage partners to develop and deploy technology solutions that centralise risk management across multiple platforms, and standardise client on- boarding, CRM and administrative functions into a centralised back office.”
Platforms and infrastructure
On the key considerations for choosing trading platforms, hosted servers and data centres, Ralich comments that brokers should look at a few factors: what type of clients they are looking to attract; where these clients are located geographically; and what regulatory restrictions exist for trading in these specific areas.
Andrew Ralich
“It’s critical for a new broker to consider how their technology provider will grow with them, and whether or not they are using a true technology provider or a hybrid brokerage/technology firm.”
148 | january 2012 e-FOREX
He adds: “In an STP model, regardless of where the trading platform is hosted, the trades will need to make it to an ECN or bank eventually. Te broker must work to reduce latency back to their liquidity provider (which in most cases means routing back to New York). Services like hosted bridging, VPS and co- location can help augment an STP offering. Tis type of combined set up allows the client terminals, trading server and liquidity to all sit in the same location. At oneZero, we have recently deployed an end to end solution in Equinix NY4 to help our broker partners
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