As the London Summit is right around the corner, we continue with our online presentation of the over 40 speakers ahead of the show.
CFH Clearing will take an active role at the event in both the retail and the institutional space, reflecting the broad scope of its offering.
We sat down with the group’s CEO to learn more about what currently keeps him busy, and what delegates can expect to hear at the CEO roundtable panel, held on November 15th.
What is your role and what does your role entail?
As the group CEO, I am responsible for leading the development and execution of the group’s long term strategy with a view to creating shareholder value. I focus very much on how we can continually add value to clients through a combination of liquidity, technology and prime of prime services.
What was the single most important event or development the market saw in 2016?
Brexit was undoubtedly the single biggest event in the market in 2016. Despite the surprise outcome, the industry as a whole was well prepared and in general the whole FX marketplace worked.
In terms of our sector, I think the contraction of PBs, lack of available credit and increased regulation in the industry has had major ramifications.
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These trends were already apparent a few years ago and not caused by the Swiss franc event, but the Swiss event certainly accelerated the whole development.
What are the biggest challenges that the FX trading community is facing? How do they affect your field?
At a very basic level the industry is maturing. It is tougher than ever to onboard clients. Regulatory and reporting requirements increases and capital and credit requirements are increasing. At the same time, people’s desire to trade speculative products online, via mobile and in the future in all sorts of other ways expands the space.
So, opening and operating a retail FX business is tougher and requires more capital. Providing liquidity to brokers and institutional clients is becoming tougher and requires more capital . And even providing technology in the future is becoming increasing difficult as the tech space is already required to increase investments in order to provide compliant technology to their clients.
All in all – this whole shift means we end up with a consolidated space where fewer higher quality companies will win.
What message would you like to convey to London Summit attendees?
Cost will be a major factor for all participants in the future. When selecting a prime of prime make sure you deal with a firm which has direct access to the interbank market not someone who is also going via a prime of prime.
If you are considering a technology solution take it from a reputable firm who owns and control their own tech at a very core level. Always ensure you go to the source of the products and services you are looking and then select a partner where you feel you share a common vision.
Your ability to choose the right partners throughout the value-chain will be more critical than ever to your success in the future.