This day in history: June 3, 2013: MetaQuotes takes a swing at third party software ecosystem

In episode nine of this series on FinanceFeeds, we take a look back at “This day in history” within the world of FX. Every Friday morning, we take a journey through annuls of time to look at the various groundbreaking developments that continue to take place in our fascinating industry.

Trading platform technology has advanced leaps and bounds in such a very short time.

Nowadays, the continual leaps forward made by companies that provide trading platform technology to retail FX brokerages, including the encompassing of specialist integration technology and third party providers of social trading and automated trade execution which platform providers of today fully embrace.

Just three years ago, however, things were somewhat different.

Three years ago is not a very long time at all in the development cycle of most products across many industries, however in the FX platform business, the last three years has represented a sea change, especially with regard to how the major platform provider for the retail FX sector, MetaQuotes, views third party software providers.

On June 3, 2013, MetaQuotes issued a warning on its broker support website, insinuating that certain third party application developers were ‘hacking’ the MetaTrader 4 protocol and violating the company’s license agreements.

This occurred during a time at which MetaQuotes was allegedly attempting to block internet protocol addresses (IP addresses) being used by four providers of copy trading software.

The action which was taken by MetaQuotes followed the banning of the IP of Myfxbook, a popular automated analytical tool, with MetaQuotes citing the violation of MetaTrader licenses.

Just a matter of weeks later, MetaQuotes launched its own third party software marketplace, effectively ensuring that all producers of applications and trading aids that are designed to accompany the MetaTrader 4 platform must be submitted to MetaQuotes and vetted, and then offered via MetaQuotes market place.

Earlier in 2013, competition had begun to snap at the heels of MetaQuotes as new retail platforms with API connectivity arrived on the market, the most prominent of which was Spotware Systems’ cTrader, which had opensource ideology as part of its positioning toward the exact developers that MetaQuotes had attempted to fend off.

On April 1, 2013, released the first details about the introduction of a new API called Spotware Connect.

This was the inaugrual effort by the company to allow third-party application developers easily build their own cTrader systems, and integrate existing FX related products into the cTrader platform.

At the time, then encumbent Vice President EMEA at Spotware Systems Brian Martin said that the open API will allow for the creation and access of API capabilities as they are added. “We know that, just like any other software business, we need to be open to third-party integrations. There will be certain times at which users may want extra platform or analytic functionality, and Spotware Connect is about putting that power in their hands.”

“We had 3 main principles in mind when we started this project” said Mr. Martin.” The first was that it should be open to absolutely everybody.”

The subsequent reaction by third party software providers to MetaQuotes’ stance was to look toward more omnifunctional distribution channels and links with different providers and indeed improve their coverage and integration possibilities.

Highly experienced fintech company Tradency promptly issued a notice stating that it would “cease operation with MetaQuotes systems, shifting Mirror Trader brokers to other various currently available proven solutions.”

Just a number of weeks later, Tradency made the very interesting move of partnering with CFH Systems, effectively elevating Tradency into the institutional arena, and placing its Mirror Trader product among an institutional clearer of prime interbank liquidity, thus being able to provide a unified package to brokers.

One of the main factors which led to this alliance was, according to Tradency, the increased international demand among clients of retail brokers internationally, therefore Tradency had begun to embark on establishing cooperation with top tier back-end providers in order to make mirror Trader available for everyone.

Aside from Tradency and Myfxbook, Zulutrade and Tradeo were also on MetaQuotes’ radar.

Indeed, Tradency came up trumps with its very well thought out response, and eventually MetaQuotes evolved its service according to the increasingly avantgarde retail platform sector and is now operating alongside and embracing a vast number of third party application providers, these four included.