It’s been a couple of weeks since the news of the rebranding of IKON Multibank into Multibank Exchange Group. With the firm aiming to deliver a new offering to the FX market and the group’s Chairman being a well known personality in the industry, Finance Magnates reached out to Naser Taher to gather more information about the company’s offering and future plans.
Multibank Exchange follows in the footsteps of IKON Multibank with the Chairman of IKON MultiBank Group, Mr. Naser Taher, announcing the restructuring of the firm into the new trademarked name in the beginning of July.
MultiBank Exchange Group (MEX Group) is a holding company, domiciled in California, USA. The newly established corporation has launched a new foreign exchange trading communication network, which began its operations last week.
What type of technology is Multibank Exchange built on?
It’s quite a special technology in a number of ways. It has both order and price driven orders. On any deal you can see the depth of market and the price of numerous banks and liquidity providers. When you’re using a trading platform in FX you typically don’t see who you are trading with. In our case, clients can see the platforms and the banks with which they are trading. Customers can trade on a client to client basis or alternatively they can simply “click and deal”. They will have a combination of prices to deal on both price driven and order driven.
What made you choose this way of operation?
We have signed an agreement with the Chinese government to build an exchange because they wanted to have their own proprietary technology. The FX market doesn’t have the greatest reputation when it comes to transparency. Our aim is to clean up the market and make it transparent and fair for all industry participants. We wanted to raise the bar with exchange trading, which is a more equitable trading environment, which maintains the highest level of liquidity. As things stand at the moment there are a number of of electronic exchanges, but they are limited to very big institutions and banks and none of them are based in the BRICS countries.
With the usual amount of trust in the industry being limited, how will you be able to convince clients that you really are an exchange and not a b-booking venue?
The Exchange is run by a fully automated sophisticated system and software with a matching engine which ensures the aggregation and the order routing operates as a fully automatic Exchange. The architecture of the Exchange is extremely proprietary and cannot be disclosed. Suffice to say that we are heavily regulated and under the regulations, it is our duty to be completely transparent and hold the highest level of integrity in accordance with our regulations and code of conduct. It is under these parameters that our loyal clients have entrusted us for the last decade as a safe and trusted execution provider. In the event there is an inquiry as to this question, our team will have no problems in comforting the customers in relation to the issue you raise.
What are the regulatory jurisdictions which are going to oversee Multibank Exchange?
We are regulated in Australia and our Australian license allows us to run an electronic exchange network as confirmed by our legal advisors. At this initial stage we are realistically discussing Australia and China as the main jurisdictions.
Is the facility limited to FX or do you plan to offer CFDs as well?
We will have FX, metals, commodities and CFDs, depending on the liquidity of the markets. However, in the beginning we will concentrate on forex.
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Which are the perks for brokerages that connect to an exchange?
In my opinion the future of the FX market is exchange technology. Brokerages that are connected to an exchange are likely to get better pricing, more liquidity providers, substantial transparency and seamless clearing technology.
How is the order matching system working?
At the heart of the technology that we have is the ability for customers to switch between price and order matching engines, giving them several combinations of order types which is unique in the industry. The technology infrastructure is strategically located in New York, London and Frankfurt.
Why choose the U.S. as headquarters?
The primary reason for the headquarters location is the prospects for us becoming a publicly traded company. However, the Board is now considering other options particularly after we have been advised by our auditors that the Hong Kong market also offers an attractive P/E valuation. By 2019-2020 we should be able to list at a valuation in the region of $2 billion. We currently have about 3000 introducing brokers and 180,000 retail and professional customers. (The figure includes white labels and retail clients, introducing brokers, financial institutions, money managers etc.)
With over 320 employees working, we are now launching a new franchise scheme worldwide with focus on Asia-Pacific, South America and Europe with a complete white label prime broker offering. This is a strategic shift for us since our focus has shifted to expansion beyond our traditional Asia-Pacific market and move into South America and Europe as well.
Can you elaborate on the specifics of why 3 years is enough for an IPO?
If you look at other companies we have an edge in terms of technology, clients and partners. We are working on a full ECN model and think that this is a reasonable estimate.
Can you elaborate on some legal proceedings between you and your former partner?
The legal dispute has been concluded with an amicable settlement with our partner. The settlement resulted in me purchasing the assets of IKON Multibank Group and ultimately resulted in the restructuring of the group and the launch of the Multibank Exchange Group, which is a name I have used since 2005 and we will be working with this brand name as part of the reorganization and restructuring that we undertook.
What types of clients do you expect to attract the most?
Clients have become very sophisticated, especially with the use of new technology and experts advisors. We are looking for clients who are sophisticated, who are clean and trade good volumes. We hope to reach $10-20 billion of average daily volume within a year. Considering the volumes of companies such as Currenex, Hotspot and FXall, we think its a realistic and conservative goal because we have better technology.