City Index, the UK-based multi-asset broker dealer, part of the IPGL portfolio, has joined the ranks of a growing number of international brokerage firms that are setting up shop in the UAE. The move comes on the back of a recent bull run in the GCC nation’s equity markets after a dismal economic slump in 2008, under its sister brand, FX Solution’s, City Index is believed to be one of the largest brokers in the Middle Eastern region.
City Index has received a representative license under the governance of the country’s central bank. The firm will be able to solicit traders from the UAE under terms and conditions of the license. City Index, one of the UK’s most established CFD providers, operates with a physical presence in several jurisdictions, including Germany, Australia and Singapore. The latest move highlights the firm’s global strategy that is exploring frontier and emerging markets. In 2013, the UAE received an upgrade from frontier to emerging market status under the popular MSCI Emerging Markets Index, a benchmark used by institutional investors.
The country has positioned itself as a regional financial hub attracting inflows from neighbours such as; India, Pakistan, Iran and the GCC. In an interview with Ricky Husaini, Chief Investment Officer of Trading Portfolio, a multi-asset fund manager in Dubai, Mr. Husaini explained to Forex Magnates that Dubai has hit new peaks; “This has been triggered by the new wealth coming in from neighbours affected by the Arab spring.”
Although City Index is new to the Middle East, FX Solutions, a firm it acquired in 2008, has been popular in the region. At its peak FX Solutions was one of the largest brokers operating in the Saudi Arabian market. City Index’s physical extension into Dubai complements the firm’s existing business in the region. “Dubai is one of the most important and best regulated financial centres in the region,” explained Tarek Bazrbachi, Managing Director of City Index Middle East, in an comment to Forex Magnates.
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The operation is headed up by Tarek Bazrbachi who is managing director of MENA. According to Mr. Bazbarchi’s LinkedIn profile he joined City Index in September 2013 and was a former employee of ACM, the Swiss FX broker. City Index will offer its diverse range of FX and CFD instruments to Middle Eastern traders.
Regulations in the Emirate are unclear in relation to foreign exchange trading. Apart from the country’s central bank, the Dubai International Financial Centre (DIFC) operates as a financial watchdog mirroring UK financial services laws, Saxo Bank’s Middle Eastern unit is governed under the DIFC.
The UAE Central Bank has regulated financial services firms for several years, most brokers in the FX and CFD arena have an intermediary license. ADS Securities was one of the few institutions that holds a full market-making license which enables it to carry out; KYC, hold client money and trade as principal.
Intermediary firms who work as introducing brokers in the nation include; Century Financial, Orient Finance and S&S Brokerage. Most firms work with UK or US regulated clearing firms. In 2007, both Century and Orient were introducing brokers of CMC Markets. Leading banks in the UAE, such as First Gulf Bank and Mashreq Bank also offer margin FX trading to clients.
City Index has seen an influx of changes at senior management level over the last few months, interim CEO Mark Preston was officially ordained as the firm’s Chief Executive Officer. Adding salt to the wound was its annual report, showing a loss of £2.6 million.