Earlier this month, ATFX announced that it would be launching an institutional trading desk – ATFX Connect.
The London-based broker is not the first retail trading firm to have pivoted towards providing services to institutions.
Since leverage-capping regulations were introduced just over twelve months ago, several firms have created institutional desks and some larger brokers, such as CMC Markets, have ratcheted up their existing B2B operations.
But unlike some of those other brokers, ATFX is not going to be focusing solely on attracting wealthier individuals or people that qualify as professional clients.
To find out what the broker has planned, Finance Magnates spoke briefly to ATFX UK Managing Director Wei Qiang Zhang. We discussed competition, new products, and looked at who the firm will be targeting with its new institutional desk.
You’ve just launched an institutional desk. Why did you decide to do that?
ATFX is a well-established brand with a global presence in multiple locations. The firm has been successful in building and maintaining an exceptional retail product offering that it is proud of.
The ATFX brand has a large team of over 300 professionals, with a wealth of knowledge and industry know-how. It has always been the intention of our shareholders and the management team to move the company to another level. By developing our offering, we will better serve our institutional clients, who will benefit from the same high standard of customer service we’ve become renowned for.
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Who are you targeting with the new desk?
ATFX Connect can provide deep pools of liquidity and trading solutions to HNW clients, as well as brokers, hedge funds, asset management, and other institutional banks. We appreciate that clients will have different demands and requirements, so we have crafted a variety of options to meet these.
A few brokers have begun focusing on attracting institutional clients since August 2018. How do you plan on beating them?
It’s important to note the difference between elective professional clients and the professional clients that our institutional desk will be
servicing. Elective professional clients are not a new demographic for ATFX; they just have more exposure to the markets following the leverage restrictions that were introduced last year.
ATFX Connect targets more sophisticated professional clients, both individual and corporate. Our platform provides clients with access to tier 1 bank and non-bank liquidity, with prices aggregated from 20+ LPs located all over the world.
What regions do you see as being most exciting to grow in?
Firstly, It will be exciting to introduce our institutional arm of the business into Asia and the MENA region. Areas that been associated with the retail market, but recently have been exposed to new, innovative trading vehicles, broker houses, and even banks, all hungry and on the lookout for new liquidity and solutions.
We will also continue to heavily invest in the European region in all areas from technology to market news and research, to further innovate our value-added services.
Do you plan on expanding into shares trading? If not, are you going to be adding any other new products soon?
Our future plans include the introduction of share trading, as well as expanding our product range based on current platforms, and adjusting our product specification to meet the trends in the market. Our institutional desk is set to add CFD products to its platform in the imminent future.
ASIC has just announced product intervention measures akin to ESMA’s. Some have said offshore countries are likely to be pressured into changing their rules too. Where do you see this industry heading?
I think that, globally, the industry will be heading towards a more regulated environment. Based on statistics and expectations, the profitability of the risk management books of many brokers could be reduced significantly; there is an expectation that brokers will hedge more, rather than internalizing their risk. This will be a beneficial factor for our new institutional brand, ATFX Connect.