Fintech company TRAction is expanding into the UK with a London office opening. The company has been successfully providing transaction reporting services to retail brokers in Australia for some time with the firm successfully taking up a substantial market share amongst Australia brokers in the foreign exchange and CFDs trading industry, where the company already has about 30 clients.
Following on its impressive growth and dominance of the derivatives trade reporting sector for CFD and FX brokers in Australia, TRAction is entering the UK and Europe to meet the extra demand for competition in the derivatives transaction reporting service sector. The offringof the company is aiming to assist brokerages that have to report their trades under the EMIR and MiFID legislation.
Commenting on the ways in which the firm is planing to tackle its competition in the sector, General Manager of TRAction, Quinn Perrott, said: “There are 2 key areas where we think TRAction Fintech really distinguishes itself from other offerings in the market. The first is pricing structure – we have a monthly fee cap. It’s quite common in the UK for brokers to be subject to high trade reporting fees but with a reasonable yearly cap. In effect the brokers end up paying for a year’s worth of trade reporting in the first month and then get the subsequent 11 months for free. That’s why TRAction Fintech listened to the industry and got a sense of the frustration at being locked into a provider.”
The second differentiating aspect of TRAction’s offering is our service level and holistic understanding. There are plenty of companies out there that can provide trade reporting software or provide consulting on how to set things up. However there are a very select few who take on the whole puzzle, end to end, as their core business, like TRAction does,” Perrott elaborated.
On Office in Cyprus in the Works
Commenting to Finance Magnates, Sophie Gerber shared that the company is also planning to expand in Cyprus with a brand new office. The London office of TRAction already has three employees that are working on expanding the services of the firm in the UK.
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“With MiFID 2 just around the corner we believe we’ve entered the UK market at the right time when most brokers will be re-evaluating their trade reporting setups. We’ve also found that even as we come up to the 3 year anniversary of the EMIR reporting start date there is still a fair amount of confusion in the market place,” Ms Gerber elaborated.
Further elaborating on the mistakes that some companies from the industry make, she said, “Brokers are assuming FX isn’t reportable under EMIR due to the spot FX exemption. FX derivatives (like that generally traded on MT4 or similar platforms) often do have their underlying price feed from spot FX. However they aren’t exempt as they don’t ‘settle’ and don’t meet the ‘commercial purposes’ test.”
The other mistake brokers make is related to spread betting, which is considered by some firms as not being reportable because it’s gambling.
“While spread betting is gambling, it’s also a reportable OTC derivative if it is based on a reportable financial product. Basically if it’s reportable as a CFD it’s also reportable as a spread bet,” Ms Gerber explained.
There is still room for more competition when it comes to this relatively new aspect of the global trading industry. TRAction Fintech is aiming to enter a marketplace that already has some established players, but the firm is committed to a full service trade reporting business that includes data extraction and conversion to the appropriate trade repository format, consultation on the rules and regulations that apply and the on-boarding and submission of trades to an approved trade repository.
According to the company, the products that are required to report include rolling spot margin foreign exchange derivatives, Contracts for Difference (CFDs), financial spread bets and commodities derivatives.