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strictly regulated and we’ve had to develop components for post- trade data, calculating how much risk they offer clients. It’s very important to have a customisable solution especially suited for different jurisdictions,” he adds.


Growth and new markets


Te expansion of FX trading is creating more challenges for White Label providers. New markets like Asia are expanding. Established players suited to the US market are seeking new opportunities in Europe, as leverage rules become stricter at home. Large institutions are seeing staff leave to set up small operations, using the low-cost structure of a White Label to set up new businesses. Banks are


looking to the retail FX markets they once spurned for healthy new revenue streams, while traditional investment plays trudge nowhere.


Tat new customers are seeking White Label solutions is without contention. While figures specific to the sector are hard to come by, individual operators are reporting big gains in business. “Over the last year and on a rough estimate, I’d say our White Label business has increased by about 40%, certainly boosted by financial operators looking for new sources of revenues. With equity and bond markets generating almost negative returns, they’re looking for something new and highly transparent to drive profit,” reveals Filipowicz.


Te Retail FX trading marketplace is seeing rapid growth. Figures from Aite Consulting show that trading in all FX instruments in 2010 hit US$3,981 billion, of which spot FX accounted for US$1,490. Retail spot trading is now US$313 billion or 7.9% of total spot trading, nearly doubling from 2007 when it stood at US$136 billion.


Artur Filipowicz


“It’s also critical to create a synergy with your partners and that’s how the relationship should be regarded – a partnership.”


It is not just the larger well- known names in the WL sector that are reaping the rewards. Companies such as Dukascopy Bank, FX Solutions, FXCM, Gain Capital, GFT, Interbank FX, MIG BANK, OANDA Corporation and Saxo Bank dominate the White Labelling market but new players like DF Markets are seeing its growing potential and are hoping to break into it.


40 | INSTITUTIONAL FX SERVICES - THE BROKERS HANDBOOK 2012/2013


Tey face a tough battle, however, as factors which influence brokers in choosing White Labels can go against any newcomer. “We know it’s a tough marketplace and although DF Markets is a young company, we’re owned by broker Deltastock, which has been in the FX business since 1998 providing proprietary trading technology and we think this expertise gives us an edge in the provision of White Label services,” says Kisyov, a director at DF Markets and also business development manager at Deltastock.


The arrival of banks


Te demand for the White Label services is also diversifying. Once dominated by demand from erstwhile market makers and FX broker specialists, WL solutions are now being sought by banks as well. “Banks are watching the growth in retail volumes and see a revenue opportunity for themselves. And the banks with wealth management businesses are responding to client demand for the service,” says Muhammad Rasoul at GAIN Capital.


Tis development in itself brings new challenges to the White Label market. CitiFx Pro (the retail forex trading division of Citibank) uses Saxo Bank’s platform, while HSBC uses Oanda’s fxTrade platform and offers retail trading to its Hong Kong-based clients. Both Barclays Capital and UBS, once dismissive of retail FX, have also jumped on the bandwagon.


“In our experience, most retail FX initiatives inside banks are often driven by either their FX division or wealth management, neither


Brokerage Operations


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