In conjunction with Conversion Pros, Forex Magnates is currently hosting the IFXEXPO international forex summit at the Grand Resort Hotel in Limassol, Cyprus. Approximately 1,500 industry figures are present, from global banks and liquidity providers to companies which provide the technology and systems which shape the online trading world.
It is a high profile event, which along with many exhibitors representing the elite of the forex and binary options industry, encompasses panel discussions centered on events which are of importance to within the industry.
The first day is now drawing to a close, and has been a day of discussion which commenced this morning with a discussion on forex & binary online trends, conducted by Google’s Panagiotis Lamprakos, Industry Manager (Greece & Cyprus) and Einat Nitzan, an Israel-based Account Manager.
The afternoon’s panels began the detailed interactive discussions, inaugurated by the Liquidity Panel, moderated by Managing Director at Boston Prime Ltd, Mitch Eaglstein.
During the discussion, the sustainability and future growth of the retail forex market was a prominent subject, on which Drew Niv, CEO of FXCM explained “For the retail FX business to grow, trust has to increase in the retail sector. Currently, it is haunted by widespread customer belief that retail forex is an unfair business. This whole segment carries a stigma and on that basis must mature past this.”
“Customer demand is beginning to bubble up but also from a regulatory perspective. The Dodd-Frank Wall Street Reform Act contains an issue whereby a whole range of instruments are being described as swaps. If this is happening for the wholesale market, it must follow for retail.”
Jeff Ward, Global Head of FX Sales & EBS Direct at ICAP considers efficiency and economy to be of vital importance in future: “Will be a focus on cost of execution. This is where low cost value for money is becoming increasingly important. There will be a lot of compression on costs over the next few years” he said.
Mr Ward demonstrated his view on this matter, in that companies can improve efficiency and drive cost down whilst still providing seamless execution by operating a central order book and investing in their respective platform technology, therefore being able to leverage distribution internationally.
“Relationship and understanding who you’re trading with and what orders are being placed along with trading behavior are critical matters. If transparency is present, and it is known which party is dealing with which, a relationship can be built” concluded Mr Ward.
Norbert Lukasiewicz, Global Segment Head of Retail Brokers at Integral Development Corporation: We have experienced recent cases of approximately 1,000 orders per second back to back. This is relatively unknown in the institutional sector. In the retail sector, the value is recognized but institutional participants need to make sure that they can be a part of the retail sector. They understand all can go smoothly on the tech side, but they must be sure the LPs are up to it”.
“A broker should be able to run its own liquidity curve and find out whether clients are profitable after 30 minutes or one hour for example” explained Mr Lukasiewicz.
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Cyprus vs The World!
Subsequent to the Liquidity Panel was a detailed discussion on the international presence of Cyprus as a global FX center. Moderator Jon Vollameare asked: “Can Cyprus compete on a global level?”
An assumption could be made that Alpari moved out of Cyprus before the bank bail-in began to take shape due to some prior knowledge. CEO Daniel Skowronski was quick to point out that this was not the case.
Mr Skowronski explained“We were lucky that we pulled out of Cyprus just before the crisis hit. We were not tipped off, it was coincidence”.
“We came to Cyprus in 2010, it was a strategic move, there is a lot of talent here, Russian investors wanted European regulation, which has very similar functionality to FSA in UK and is therefore very credible. Last year we all know that it was a tough time for all forex brokers as volatility was low in general. The move out of Cyprus was just a cost cutting measure. We looked at the cost of operating another entire operation and decided to run everything from the UK. I would love to say that we saw the crisis coming but we didn’t. it was a strategic move” explained Mr Skowronski.
Cyprus Viewed in High Esteem
Mr Skowronski explained that he does consider Cyprus to be the second country in the world that really undertstands FX after Japan. Cyprus and Japan have that real advantage with infrastructure, staff, skill and industry knowledge.
He also considers CySEC’s moves to be the first to regulate binary options to have been a smart one: “I have to tip my hat to the Cyprus authorities for regulating binaries. This has been a product which has been peddled by cowboys and with the Japanese regulators going overboard and really decimating the industry. Cyprus has really done this well. I don’t think I can see any of that going to the UK .”
Would Alpari consider re-opening in Cyprus and re-employing in the future? “Not yet!” came Mr Skowronski’s answer.
Glenn Stevens, CEO of GAIN Capital believes the skilled workforce which is very familiar and experienced in the forex business to be a boon, along with a ready framework making it easy to establish a European office in the region. “With MiFID compliance, educated talent, industry educated people looking for work, EU passport. If youre growing as a company the talent pool here is worth considering. We looked at Bermuida/cayman where insurance and trust companies set up, but there is no talent and it would have to be imported.”
This evening, a party will be held at nearby Dolce Club, where socializing after a very interesting day will be a welcome fixture.