The Cook Islands-regulated forex brokerage 4xCube is approaching its first anniversary and continues to reap the rewards of being regulated offshore.
Although historically brokers licensed through non-standard jurisdictions may have been seen as providing an inferior service to those regulated by European or Australian counterparts, aggressive rule changes by entities including both ESMA and ASIC have left many clients looking for alternative routes to market.
As João Monteiro, Executive Director and founder of 4xCube, explains: “when we started laying the foundations for the brokerage back in 2017, it was already clear that regulatory change was going to present a series of challenges for brokers and clients alike.
The extent of the disruption continues to impact the performance of those companies regulated in jurisdictions including the UK, Germany, Cyprus and Australia, meaning that our plan to work with a more progressive regulator is proving ever more beneficial on a day-by-day basis.”
Introducing Brokers (IB) play a valuable role in communicating a brokerage’s benefits out to a wider audience and deserve to be remunerated for it.
Again, the offshore regulation is providing benefits here, as payments to IBs can be made without contravening rules such as those included in MiFID II, whilst 4xCube has structured its IB portal to provide the upmost flexibility.
IBs can sculpt pricing to meet individual client requirements, monitor account performance in real time and take payouts as frequently as required.
João Monteiro, added: “Many clients are eager to still be able to trade with reasonably high levels of gearing, again something which both regulators in Europe and Australia have been keen to eliminate. But we don’t believe this is about irresponsible levels of leverage – some trading strategies require that and it’s patently unfair that some traders are being disadvantaged by having the ability to take meaningful positions, especially if they’re looking to just take a few points from the trade on each turn.”
The success of the 4xCube proposition has seen the company undertake further rounds of product development.
The hugely successful partnership with Hong Kong based Traderace has delivered an accessible trading competition that is open to all and sees prizes worth up to EUR1.5 million a month being returned to traders as they take a share of the spreads paid – in addition to retaining any profits made.
A new mobile and web-based platform is also being deployed, developed in conjunction with Wintrado, providing options beyond the widely adopted MT4 trading platform.
And for those who are still sceptical over trading with a brokerage regulated by a lesser known entity, 4xCube has also signed up with the Financial Commission, an independent arbitrator for the FX trading community.
This body not only authenticates the underlying business and its trading model, but can also provide adjudication and – where necessary compensation – in the event of a dispute between client and broker.
More than 20 brokers, including well-known names from Australia and the UAE, are now members of the Financial Commission. Since its inception some 40 years ago, this industry has built a reputation for innovation, embracing both opportunity and the need for change.
4xCube’s move offshore, its careful construction of a business model that works for all involved and the provision of those additional guarantees shows that the theme of innovation is still very much at the heart of this industry.
Rich pickings are still to be had for those willing to embrace the theme of change.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.