IS Prime Managing Partner: 'Brokers are Changing their Attitude towards Risk'
by
Dan Magen
Jonathan Brewer, co-founder and Managing Partner of IS Prime, speaks about changes in the retail and prime forex markets.
Established by two leading figures in the e-FX arena, Raj Sitlani and Jonathan Brewer, IS Prime has been providing prime of prime (PoP) solutions for almost three years now. Finance Magnates sat down with Mr. Brewer, Managing Partner, to discuss regulations, the state of the industry and how the law of unintended consequences may be embodied in retail brokers going offshore.
How do you view the current state of the industry?
The retail FX industry to me seems to be in good health, although I’m sure that most participants would be keen to see a little more volatility. It seems as though the larger brokers are getting larger and that the smaller guys and start-ups are finding it a little more difficult to grow (with the exception of Asia), which would suggest that a period of consolidation may be approaching.
One general theme that we are experiencing is that brokers seem to be looking to move away from the 'close your eyes and swing the bat' risk model, to a more controlled, more quantitative approach which yields better, more consistent returns. This is an encouraging dynamic for the industry as a whole, and for IS Prime, in particular, given the resources available to our clients through IS Risk Analytics (ISRA).
IS Prime entered the prime of prime market three years ago. What are the main challenges that the company has faced so far?
We had a clear vision from the outset – to build a market leading prime of prime offering, leveraging state of the art technology and quantitative research and trading – but starting a business from scratch in a competitive industry was a big challenge in itself.
Within just under three years, I believe that we have established ourselves as the best prime of prime brokerage in the industry. We have a very strong market share, with almost 100% client retention rate over three years. Many clients have proactively moved their business to us, which I take as a huge endorsement of the quality of our offering.
Finding the right people for a new business can also be a challenge. We have been able to attract very high calibre, experienced and motivated people into our team and they have played a major role in our success to date.
Our challenge moving forward is to spread the word about our expertise to a global audience and to continue to evolve our offering in order to remain a market leader.
What is your opinion on the latest FCA limitations on forex retail trading, and how do they affect IS Prime?
The impact of this happens downstream from us because we do not service retail clients. However, as a general comment, whenever the regulator intervenes in this way in order to try to protect retail clients, it often has the opposite effect. It can drive these very clients to offshore brokers who are able to offer terms that FCA brokers are no longer able to offer. This is not, in my view, beneficial for the industry or necessarily the clients whom the regulator is trying to protect.
The FCA is a highly respected regulator and their actions are motivated by protecting the industry/consumers. However, the law of unintended consequences often comes into play when intervention occurs.
What trends do you currently identify in the prime of prime brokerage market?
We are seeing that clients in all key retail FX territories have the same priorities. They are looking for an FCA regulated prime of prime broker who can offer highly tailored Liquidity and a breadth of products including risk services.
Clients of all sizes are becoming more and more sophisticated and therefore the calibre of a PoP’s technology offering is also a key consideration for them when selecting their PoP broker.
What are your goals for the company over the next few years?
Our focus remains the same as when we set up the business - to provide highly tailored liquidity, risk and margin solutions. Our immediate goal, however, is to attract a broader range of international clients and to continue to develop our technology and service offering.
In the mid-term, we are in the fortunate position that we can look to be opportunistic in opening new business lines or acquiring complimentary businesses, without deviating from our main, core operation.
What do you think sets you apart from the competition?
IS Prime provides a one stop shop that incorporates liquidity in FX, indices and commodities, technology, revenue share and risk services to brokers of any size or sophistication. We are different from most competitors as we are not a white label of someone else’s technology. Through our philosophy of buy and build we have constructed a unique PoP solution, with very advanced proprietary technology.
There is simply no other PoP provider that offers the breadth of service which is available from IS Prime. We stand out in the market because of the combination of our liquidity, risk services, technological and quant resources and experience of our team.
What new fields or opportunities do you see as growth potential in the market?
Over the last year we have set up an office in Hong Kong and acquired a risk consultancy business in the US. These both present IS Prime with huge growth opportunities.
Established by two leading figures in the e-FX arena, Raj Sitlani and Jonathan Brewer, IS Prime has been providing prime of prime (PoP) solutions for almost three years now. Finance Magnates sat down with Mr. Brewer, Managing Partner, to discuss regulations, the state of the industry and how the law of unintended consequences may be embodied in retail brokers going offshore.
How do you view the current state of the industry?
The retail FX industry to me seems to be in good health, although I’m sure that most participants would be keen to see a little more volatility. It seems as though the larger brokers are getting larger and that the smaller guys and start-ups are finding it a little more difficult to grow (with the exception of Asia), which would suggest that a period of consolidation may be approaching.
One general theme that we are experiencing is that brokers seem to be looking to move away from the 'close your eyes and swing the bat' risk model, to a more controlled, more quantitative approach which yields better, more consistent returns. This is an encouraging dynamic for the industry as a whole, and for IS Prime, in particular, given the resources available to our clients through IS Risk Analytics (ISRA).
IS Prime entered the prime of prime market three years ago. What are the main challenges that the company has faced so far?
We had a clear vision from the outset – to build a market leading prime of prime offering, leveraging state of the art technology and quantitative research and trading – but starting a business from scratch in a competitive industry was a big challenge in itself.
Within just under three years, I believe that we have established ourselves as the best prime of prime brokerage in the industry. We have a very strong market share, with almost 100% client retention rate over three years. Many clients have proactively moved their business to us, which I take as a huge endorsement of the quality of our offering.
Finding the right people for a new business can also be a challenge. We have been able to attract very high calibre, experienced and motivated people into our team and they have played a major role in our success to date.
Our challenge moving forward is to spread the word about our expertise to a global audience and to continue to evolve our offering in order to remain a market leader.
What is your opinion on the latest FCA limitations on forex retail trading, and how do they affect IS Prime?
The impact of this happens downstream from us because we do not service retail clients. However, as a general comment, whenever the regulator intervenes in this way in order to try to protect retail clients, it often has the opposite effect. It can drive these very clients to offshore brokers who are able to offer terms that FCA brokers are no longer able to offer. This is not, in my view, beneficial for the industry or necessarily the clients whom the regulator is trying to protect.
The FCA is a highly respected regulator and their actions are motivated by protecting the industry/consumers. However, the law of unintended consequences often comes into play when intervention occurs.
What trends do you currently identify in the prime of prime brokerage market?
We are seeing that clients in all key retail FX territories have the same priorities. They are looking for an FCA regulated prime of prime broker who can offer highly tailored Liquidity and a breadth of products including risk services.
Clients of all sizes are becoming more and more sophisticated and therefore the calibre of a PoP’s technology offering is also a key consideration for them when selecting their PoP broker.
What are your goals for the company over the next few years?
Our focus remains the same as when we set up the business - to provide highly tailored liquidity, risk and margin solutions. Our immediate goal, however, is to attract a broader range of international clients and to continue to develop our technology and service offering.
In the mid-term, we are in the fortunate position that we can look to be opportunistic in opening new business lines or acquiring complimentary businesses, without deviating from our main, core operation.
What do you think sets you apart from the competition?
IS Prime provides a one stop shop that incorporates liquidity in FX, indices and commodities, technology, revenue share and risk services to brokers of any size or sophistication. We are different from most competitors as we are not a white label of someone else’s technology. Through our philosophy of buy and build we have constructed a unique PoP solution, with very advanced proprietary technology.
There is simply no other PoP provider that offers the breadth of service which is available from IS Prime. We stand out in the market because of the combination of our liquidity, risk services, technological and quant resources and experience of our team.
What new fields or opportunities do you see as growth potential in the market?
Over the last year we have set up an office in Hong Kong and acquired a risk consultancy business in the US. These both present IS Prime with huge growth opportunities.
Institutional FX Demand Continues to Climb in April
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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