IG Group has just announced at the Finance Magnates London Summit that it is expanding its institutional offering by adding access to single name equities via FIX API. The company’s Global Business Development Officer Mark Chersterman spared some time during the busy event to answer a few questions related to IG Group’s development.
What is the next set of novelties that IG Group is deploying to the market?
I’m very pleased to be able to announce that as of today that we are launching the ability for our clients to trade and price a global selection of the top single name equities using our market leading FIX API. This further enables our clients to broaden the product set and appeal of their proposition, enabling differentiation in such a competitive market place.
What are the latest developments in IG Group’s institutional offering from a product perspective?
We have recently focused significant time and resource into developing a dedicated Institutional offering, to specifically target the needs of banks, brokers, hedge funds and other institutions. This institutional offering leverages the strengths of our retail offering but has all the bells and whistles that institutions would expect from a Tier 1 liquidity provider. We have focused heavily on product including our range of asset classes offered to institutional clients, but we have also improved pricing, reporting, support and technology. We are also proud to launch our dedicated new website to highlight the quality and depth of our institutional offering.
How many broker clients do you guys have and do you offer different tiers of execution (STP and/or market making)?
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We have a large number of corporate clients across sectors and geographies, including brokers, banks, and hedge funds. We have execution options to suit most counterparties, including both OTC and DMA execution. IG is the world’s largest retail CFD broker, so our OTC execution option benefits from the deep liquidity that our retail clients provide on top of primary market liquidity. Our DMA streams allow clients to trade both FX and equities in the primary markets using IG’s relationships with Tier 1 banks, non-bank liquidity providers, exchanges, and MTFs. Our 42 years of experience, strong balance sheet, and size mean that we have developed long-lasting, strong relationships in the primary liquidity space, and our clients can leverage these relationships for their own trading.
Where do you see the highest demand for IG’s offering and what is the difference between yours and competing offers on the market?
Although we’re seeing traditionally good demand for our FX liquidity provision, the demand for our index and commodity CFDs from the broker community is growing very strongly. We are the only liquidity provider who prices over 20 indices 24/5, even when the underlying exchange is shut, which, in addition to giving clients many more trading opportunities, helps risk manage positions much better if something unexpected happens overnight.
Although this is normal for the FX world, we feel it is ground-breaking for the CFD world, and is providing a lot of comfort to clients who are more used to FX. In addition to this we have also created a smart but simple algorithm that translates commodity futures in to a continuous, non-expiring market that FX traders are used to, so clients can trade a range of commodity markets as they would an FX market, without worrying about monthly or quarterly expiries.
There is a huge world of trading opportunity outside of FX markets, and we are making it as simple and easy as possible for our clients to access that opportunity, and for our broker clients to open the doors to their clients, enabling greater revenue opportunities. We have one of the most advanced FIX APIs on the market, and when you package this up with the balance sheet strength of IG, we believe we have a very compelling offer.
How big is your institutional business and can you give us some stats?
IG’s institutional business is 5-10% of our total revenue (the company’s revenue in the first quarter of fiscal 2017 that ended in August 2016 was £111.4 million, so the total comes between £5.7 and £11.1 million). Our retail business has seen phenomenal growth over the years, but now we have a dedicated team focusing on our institutional business we expect to make significant headway in to that market.