US headquartered online broker Forex Capital Markets (FXCM), operating a number of subsidiaries and regulated businesses including retail and institutional foreign exchange offerings, CFD and metals trading and other product lines, today shared exclusively with Forex Magnates its launch into the Prime Brokerage (PB) space, with a new Prime of Prime (PoP), also known as Prime of Prime Broker (PoPB) offering.
Historically, the prime brokerage space had only been something that large banks and dealers could offer, and the clients they targeted were also substantial brokerages with significant collateral available. However, in recent years as the emergence of prime of prime brokers enabled these offerings from larger players to be re-sold and re-packaged into a range of solutions and offered to less-capitalized brokerages and often at a more competitive cost, the space started to evolve, and competition picked up.
Another example, perhaps more analogous to FXCM’s announcement, is when CFH markets changed its name to CFH Clearing to more accurately reflect its business, as the number of billions of dollars in credit lines it had available had reached a level more comparable to a prime broker. Most recently Rabbobank said it was exiting the space, as even some of the world’s largest banks are finding it tough to compete in this changing side of the Foreign Exchange industry.
For FXCM, considering its existing market share as part of the top ten brokers world-wide (including Japan-based brokerages), the expansion of its business into the field of PoP solutions appears logical, and as explained by the firm’s CEO of FXCM Europe, Brendan Callan, a ‘natural progression’.
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Mr. Callan explained to Forex Magnates’ reporters live today at the iFX EXPO International in Cyprus, how the evolution into the PB space was a natural progression considering the number of existing white-labels and brokerages that the company already works with, and how he anticipated the offering will easily be complemented along its other institutional partnership offerings.
He said, “Quite a few firms are walking away from the PB business and walking away from their clients that rely on it. FXCM is happy to serve that need with our new POP service. We can offer prime of prime both with and without our leading liquidity and execution services.”
FXCM’s CEO, Drew Niv, also present at the iFX Expo, is scheduled to speak on a panel today moderated by Forex Magnates, and joined by other senior industry executives, on the subject of sales and managing sales teams.
The company is also preparing a new platform launch, including multi-asset trading capabilities for its clients, as it also looks to merge clients into its main Trading Station platform and consolidate one of its other platform offerings – such as those in its active traders portal. The company has recently seen volumes drop, which were thought to have been tied directly to lower market volatility, as explained to our reporters.
The news follows the recent acquisition of FXDD’s US Retail Forex account, as analyzed recently by Forex Magnates, after first breaking that news.