CMC Markets’ Richard Elston examines the difference between white label partnerships and API connectivity
“There’s no doubting that a White Label is a far more complex proposition to execute, but it’s a valuable way of getting market exposure where intermediaries already have a strong brand and geographical presence” – Richard Elston, Head of Institutional, CMC Markets
By Richard Elston, Head of Institutional, CMC Markets
Retail CFD and Forex trading may now be considered a mature market, but the infrastructure that enables the widest possible dissemination of these products continues to evolve – and it’s the quality of service to end-users and intermediaries that’s very much front of mind.
Historically, those institutional intermediaries wanting to deliver a third party service had one of two options. Either they looked for a white label provider that offered a complete ‘broker in a box’ solution, or they sought out an Application Programming Interface – API – that allowed a third party execution platform to be plugged into their existing technology.
In recent years, some of the biggest players in the sector have realised there’s a significant benefit to be had in pulling these two disparate systems together. The presence of scale is good as internalising flows improves liquidity and keeps costs down, it’s the optimal solution for risk management and it ensures the fastest possible execution speeds.
To this end, CMC Markets has invested in excess of £100 million in its proprietary, Next Generation technology. Intermediaries can be assured that whether they are just looking for liquidity or an entire turnkey solution, they’re going to be drawing from exactly the same flow.
Which of the two solutions a client takes depends on a number of factors. There’s no doubting that a White Label is a far more complex proposition to execute, but it’s a valuable way of getting market exposure where intermediaries already have a strong brand and geographical presence. These clients have a very high expectation of what we will deliver both in terms of an intuitive interface for the end user, as well as seamless downstream technology.
We make no secret of the fact this is very much a two-way deal, and work closely with our White Label partners to ensure they make the most of the proposition. Similarly, there’s a weight of retail brokers out there, typically running MT4, who are always looking to serve up the best prices and execution options to their clients. In instances like this, the API is more appropriate, but regardless of the route taken, it’s all pointing back to a common core with exactly the same underlying prices and liquidity on offer.
It is of great consequence that CMC Markets delivers its institutional offering from all fourteen worldwide offices and has recently appointed Andrew Wood as Institutional Business Development Manager in Sydney to support clients right across the Asia Pacific region.
CMC Markets has already made great strides in terms of growing its CFD and Forex liquidity provisions to intermediaries, who appreciate the benefits of partnering with a London-listed entity, underpinned by a strong balance sheet. CMC Markets is also one of the most established providers, with over 25 years of experience in the sector.
The Institutional division is one of the key pillars of the CMC Markets proposition and the deployment of the Next Generation technology is making the firm an even more popular counterparty to work with. Institutions are look at how they can offer the very best trading experience in terms of price, risk and execution, in an increasingly competitive market.
