Executive Interview: Jonathan Brewer, Head of eFX Business Development at Sucden Financial

Sucden Financial’s presence within London’s financial services industry began in 1973 when it was established as the brokerage arm of French parent company Sucres & Denrees (also known as Sucden Group). The company was originally founded in Paris in 1952 by Maurice Varsano. Sixty years later, the company is still privately owned and Maurice's son, Serge Varsano, is the current Chairman of the group. The group maintains a presence as one of the world’s largest physical sugar trading companies, employing over 5,000 people in over 30 offices across the globe.

As a brokerage, Sucden Financial involves itself in all aspects of trading, with clients including traders, fabricators, producers, consumers, investment houses, hedge funds, commodity firms and high net worth individuals.

In this week’s Executive Interview, Head of eFX Business Development Jonathan Brewer speaks to us about his experience in electronic trading, leading to his tenure at Sucden Financial.

Can you tell us about what attracted you away from your position at Goldman Sachs to join Sucden Financial, and what your immediate vision was to further develop Sucden Financial’s electronic trading operation.

“Before Sucden Financial, I worked in electronic trading sales at Goldman Sachs, covering listed derivatives for European hedge funds and real money asset managers. I moved to Sucden Fincancial as part of a project to centralize electronic trading at the firm. The remit was to consolidate the electronic trading offerings and to subsequently increase Sucden Financial's footprint”

“Sucden Financial is a very traditional added value voice broker, specializing in commodities. For this reason I was surprised that there was such a long established FX business, and I realized that Sucden Financial was well placed to become a serious niche player in this market.”

"I wanted to bring my knowledge and experience of meeting the demanding needs of billion dollar hedge funds and multinational companies to the eFX space, particularly to retail brokers to give them a more professional, institutional and most importantly proactive service. In general we have found this strategy to be well received which we feel has previously been lacking in this space.”

“Within 4 years, we have expanded to a stage where we now trade more volume in a morning than we used to trade in a month. FX is now a core asset class at Sucden Financial and we are a broker that I feel any FX market participant should consider.”

How is Sucden Financial viewed in the FX and CFD industry? Is it a broker, or has the company leaned more toward technology and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term provision? If so, what edge does it have over its rivals such as third party technology providers with open systems such as xFSOL's X3 Open Hub? The advantage of third party tech providers is that they are often liquidity unbiased and they offer brokers the ability to tune their systems accordingly. How does a fixed system without customization compete against this?

“Essentially we are a broker and our core product is 100% STP FX and bullion liquidity. We deliver our liquidity to clients via a number of means, either through our white label or directly into a client's technology solution via our APIs.”

“While we are able to offer tailored white label solutions for clients, I do not see us as a technology provider at all. We prefer to partner with best of the third party breed of technology providers as the best means to deliver our liquidity.”

Sucden Financial recently added Currenex to its technology offering. Please elaborate how this will enhance Sucden Financial's technology provision to its clients, and talk about its place in the institutional segment.

“As the scale of our business continues to grow, we need to continue to expand our offering. Currenex has a loyal following in the industry, especially amongst institutional clients. Some clients have insisted that they would only trade with us if we deliver our pricing to them via Currenex.”

“As previously stated, our product is STP liquidity rather than technology, so we are essentially aggregator agnostic. We have a long standing relationship with Integral, which has proven to be very successful, and Integral remains a key strategic partner going forward.”

“Currenex is not likely to be the last addition to our technology offering in the first half of 2013.”

What has the take up of Index and Commodity CFD trading been like since these instruments were added in December last year? Do you have any volume info on this?

“Index and Commodity CFDs are to a certain extent a product that we offer to facilitate our FX offering. Many clients are looking for a one stop shop, and therefore it was essential for us to be able to offer these products.”

“We trade around $1 yard notional value per month on these products, so the volumes are small, but we have been able to access many new clients that we would not have been able to access previously, and the FX volume from these same clients is significant.”

Spotware selected Sucden Financial as a liquidity partner last September. It would be interesting to learn about the recent integration with cTrader, and any technical matters that arose from the move.

“This is all part of the continuation of our technology neutral strategy. We saw some initial client demand for cTrader, which lead us to decide to offer our liquidity into the platform.”

“cTrader offers something different to the ubiquitous MT4, so we felt that being a liquidity provider into this venue would add value to our existing and new clients.”

“We have noticed that many brokers are looking to add additional platforms at the moment, in what appears like a platforms arms race in the anticipation that another platform my eventually replace MT4 as the most popular Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term for retail clients. Spotware’s CTrader is just the first of many platforms we will be integrating with. Watch this space.”

The Far East is a region of interest to Sucden Financial, and the company’s Hong Kong office was expanded recently. What is the next step in the Far East and is China an important market? If so, how will Sucden Financial get into China given the very difficult government restrictions?

“As a London Metal Exchange Ring dealing member, Sucden Financial is a very large player in base metals, which gives us a good footprint and good brand awareness in Asia. On the back of this, we have gained many FX clients based in the Far East."

“It is safe to say that Asia is a focus area for Sucden Financial, but this region does not come under my remit and as such, I am afraid that I cannot be more specific about the plans that we have in this region going forward.”

Please elaborate on trading volumes for 2012. What were they made up of and did Sucden Financial experience a downturn as was prevalent in the industry in general?

“We were fortunate enough to have a very good year in foreign exchange in 2012, and an absolutely storming start to 2013.”

“This is on account of the fact that we are a growth business, but most importantly it shows that we are able to give our clients a competitive edge to help them grow even in the most difficult markets. Our 100% STP institutional standard service focused offering seems to have struck a chord with our clients and also the end retail clients that many of them service.”