FinanceFeeds traveled to the United Arab Emirates last week to meet with leaders in the trading industry for the first time since the pandemic at the iFX EXPO Dubai. Being face to face again was a memorable experience that participants will carry with them for years to come.
Key attendees at the event were the Advanced Markets team, representing the true provider of liquidity, credit and direct market access technology (DMA) solutions.
Nikolai Isayev of FinanceFeeds spoke with Natallia Hunik, Chief Revenue Officer at Advanced Markets, to learn more about what the main prime broker is so far that he has raised funds from Corbel and Forexify to fuel its next phase of growth.
First of all, a time to appreciate being back on the front line and being able to shake hands with customers and prospects, which was once a given, just like the air you breathe.
“I don’t think I’ve ever seen the folks at FX smile so much, ”Ms. Hunik said, adding that the event was very productive and with a great atmosphere. “I see a general trend that a lot of companies are moving to Dubai, so I would expect more shows to be held here in the future.”
Regarding Forexify and Corbel investments, Ms. Hunik praised the “Another milestone for Advanced Markets, one of the oldest and most respected companies in the industry, founded in 2006”.
“We will expand our global presence and bring new asset classes into the equation,” continued Ms. Hunik, highlighting the company’s already established position across the world, including licenses in Australia and the UK. , as well as offices in Europe. and in Asia, in addition to the company’s headquarters in the United States.
Advanced Markets recently formed an entity in Bermuda, appointing ex-Accuindex Samer Mourched as CEO, as the company adds emerging markets to its strategy to become the preeminent broker in the FX and CFD trading industry. .
Advanced Markets remains a fully DMA, 100% STP, Prime of Prime broker. The extreme volatility and disruption brought on by the Covid-19 pandemic, especially in 2020, has resulted in the phenomenon of many brokers failing and has led the industry to be more concerned than ever with transparency and conflict. interests. This is where Advanced Markets comes in.
“If you are a fund manager, you will probably want to look to do business with a company that offers a 100% STP business model. This model provides full transparency and signals every liquidity provider behind every transaction. “It eliminates the conflict of interest, a conflict that also exists in stocks as we have all seen recently with Robinhood. The conflict is still there, ”she said, further explaining that“ the 100% DMA model may not be suitable for everyone as there are certain advantages to using market makers ”.
So it all comes down to the goals: if you want guaranteed transparency, you’ll probably want to deal with a 100% DMA company.
Are authorities doing enough to regulate conflicts of interest? The leader of Advanced Markets said that best execution policies, such as RTS, are a double-edged sword. They somewhat protect users from dishonest brokers, but the negative effect is that a lot of people are moving overseas to avoid the leverage and product restrictions that come with increased regulation.
“My personal opinion is that we lack a self-regulatory organization that encompasses all brokers,” she said, reminding me that a global FX code of conduct already exists, but “to my knowledge, only Advanced Markets and another broker have signed so far.
But how can a broker be sure that they are partnering with a 100% STP (full DMA) liquidity provider? Well, that can’t be the case unless the broker is licensed in the European Union which means the client can see the RTS report. “If it’s outside the EU, you kind of have to believe what they’re telling you,” she said.
Turning to the democratization of trading, volatility and the role of advanced markets in it, Natallia Hunik believes crowd power is here to stay thanks to new technology. An anecdotal example is a popular signal provider who joined a broker once. Over 10,000 accounts were opened the same week. Not only is this an opportunity for brokers, but it also presents the challenge of managing 10,000 new accounts doing the same transactions at the same time.
“We have access to original sources of liquidity in the forex market through our Tier 1 prime brokerage relationships with UBS AG and Standard Chartered Bank. Most brokers source through multiple hops. We can solve this problem. We provide the largest pool of customizable liquidity, aggregating top banks and non-banks, ECNs and multi-asset providers.
“So if a market tightening or other outliers occur which may lead some liquidity providers to turn off their flows, Advanced Markets still has plenty of backup / failover providers due to its pricing infrastructure and failures. unique relationships, ”she said, explaining that“ with black swans occurring more and more frequently, market participants need a reliable source of liquidity to trade with confidence ”.
Many regulators now require negative balance protection (NBP), with the Australian ASIC recently enforcing this rule. This question is quite an interesting topic because while the industry sees where regulators are coming from – to protect end users – brokers remain exposed. They have to “set it to zero.” Take the hit ”.
“I see the merits of the policy but it has not been sufficiently analyzed from the point of view of the long-term effect. The rule has encouraged many brokers to do more market making instead of auto hedging or STP ”.
The commerce industry never sleeps. It is constantly evolving with technological changes prompting regulators to make new efforts to control markets and protect investors, which then creates a new chain of reactions in an endless cycle.
No matter what the changes, transparency will never lose its value in an industry built on trust.