Exclusive: ADSS Grows as MENA & Asian Results Offset ESMA

Last year has been quite a challenge for the majority of industry players. The market changes in Europe prompted brokers to undertake a significant regional diversification. While many companies have been preparing for the market shift for some time, not that many managed to strike the right balance in terms of geographical diversification.

One of the companies that actually managed to prepare well enough for the big market changes of 2018 turns out to be ADSS. The firm shared with Finance Magnates some exclusive figures as the firm’s Global Head of Sales, Jason Hughes elaborated on the latest performance for the firm and its strategy in the coming quarters.

Growth in 2018

As already mentioned above, ADSS managed to grow some of the key metrics for brokers in the industry. For starters the brokerage business excelled in MENA and Asia, leading to an offset of the difficult market conditions in Europe. The number of ADSS’ clients increased by 7.2 percent in 2018, while trading volumes rose by 5.1 percent when compared to 2017.

“Over the past few years, we have focused on diversifying our business model with the launch of Asset and Wealth Management, both of which added significant business in 2018. This helped grow our reputation as a leader in this sector,” explained Hughes.

The main focus of the company for 2019 appears to be to continue investing in talented hires. The company is also committed to continuing to invest in in-house technologies and new growth business opportunities and sponsorship initiatives.

While the goal of the company is to create one of the largest independent global brokerage businesses, the core of ADSS' business has always been about investing and trading a range of asset classes.

Hughes shared that the company will continue to prioritize these areas of the business and will provide focused and improved services for clients that allow them to make better-informed choices.

Asset Management & Proprietary Tech

As ADSS has diversified its brokerage through the development of Wealth and Asset Management (WAM) portfolios through ADS Investment Solutions (the ADSS Group Wealth and Asset Management arm), the company also aims to harness the regional strength of the UAE and local markets.

At present, the company is split between institutional, professional and retail segments. Over the past year, ADSS reports having increased its institutional clients base tenfold. Over 2018, they accounted for 45 percent of total volumes.

The company’s proprietary systems and platforms are also an important part of the firm’s business. Used by institutional and professional traders alike, the share of total volumes transacted via the proprietary OREX platform amounted to almost 40 percent.

“Client usage of the platform experienced double-digit growth compared to 2017. This clearly highlights the increasing adoption of ADSS’s technology by our clients. But offering our clients choice is also important and our multi-platform approach gives them options,” shared Hughes.

The Head of Sales of ADSS says that investing into the company’s own proprietary technology gives the firm the flexibility to quickly adapt systems and functionality to gain an advantage in the market, while white-label solutions offer access to the best industry benchmarked systems.

Regulatory Impact and M&A Opportunities

While the bar has clearly been raised for the industry for pretty much every brokerage company, the management of ADSS continues to be focused on organic growth. According to Hughes, the regulatory changes for the industry are a short term difficulty that will produce a medium and long-term benefit.

"New regulations will normalize and standardize future services offered to clients and will create a level playing field across the industry. We are well prepared for and welcome these regulatory changes and we fully understand and support the overall outcome of protecting our clients,” Hughes elaborated.

While the ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term changes are pretty well covered, ADSS shared with Finance Magnates that Middle Eastern regulators have been fully engaged with the recent FINCA and OECD reviews. Both initiatives are aiming to help the development of the markets and appear to be essential for the region as it continues to mature and grow.

“We welcome the Memorandum of Understanding (MOU) Memorandum of Understanding (MOU) A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is view A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is view Read this Term) that covers the marketing and promotion of investment funds. It has been signed by UAE regulators; it’s a game changer and long awaited. This will lead to increased cooperation between financial centers, which is positive news for all clients,” elaborated Hughes.

While the market seems to be ripe for M&A opportunities, ADSS continues to be focused on organic growth since day one. Nevertheless, the firm is not planning to ignore any good opportunities if such arise.