FinanceFeeds speaks in detail to Louay Amhaz at oneZero’s newly opened Cyprus operations on what Cyprus brokers want in terms of execution methodology, and how retail clients now demand the absolute highest accuracy in pricing and trading environment from their brokerages
In the midst of a recent surge of regulatory activity in the entire European Union region, one trend continues: Cyprus is continuing to attract high quality global technology and ancillary service providers as the Retail FX industry continually evolves, in what has become a global hub for the entire ecosystem.
This morning, FinanceFeeds spoke to retail connectivity, infrastructure and software company oneZero Financial Systems, which has now established operations in Limassol, with Louay Amhaz at the helm.
Mr. Amhaz joined oneZero from FX liquidity bridge and integration company PrimeXM in Cyprus, and has been appointed Business Development Manager at oneZero’s new operations, located in the heart of the Old Port in Limassol.
Mr. Amhaz explained the structure of the new operations to FinanceFeeds this morning, saying “I joined oneZero seeing a great opportunity to expand into the region, with a local presence for both business development and support. With numerous clients already in Cyprus, and a growing base of both retail and institutional brokers, the local presence will help us more directly attend to our clients and partners.”
“We have already built a dedicated support team working out of the new Cyprus location, which will not only attend to the vast amount of brokers here in Cyprus, but also complement our existing support teams in North America, Europe and Australia. With oneZero’s client base spread globally, quality operations and support has always been a top priority. There is an excellent talent base that exists in Cyprus, and our goal is to find the best people available to service our clients.” detailed Mr. Amhaz.
Elaborating on his appointment at oneZero to effectively run the Cyprus business development activities of the company, Mr. Amhaz explained “Though I came from the Retail Bridging space previously, I certainly had a lot to learn, as the oneZero product is highly developed. There are numerous ways for brokers to increase their revenue if they know how to use it, that being a very important consideration for firms here.”
It seems that despite oneZero’s reputation and existing base of business, a physical office became a necessity to continue to grow in the region. As explained by Mr. Ahmaz, “Often, companies here prefer actual face-to-face relationships and a local presence, and sometimes prefer not to discuss too much if the firm is abroad. It is a different way of communication here in Cyprus, whereby meeting and networking are very important parts of an ongoing business relationship” he said.
“In addition to the need to be able to interact with clients, Cyprus has over 100+ brokerages which are regulated by CySec and are based in close proximity to each other, which amplifies the need to work closely with them. In turn, retail brokerages in Cyprus are very well positioned to do business internationally, which means that the provision of integration technology here to local brokerages is really a means of provision to a global audience.” – Louay Amhaz, Business Development Manager, oneZero Financial Systems
“It’s important to note that Cyprus is not just a key region to sell into locally. If a client is coming from the UK, Western Europe or Eastern Europe, accessibility is very easy, as it is from the Middle East, or the Arabian Peninsula. The environment is totally different here from other regions, partly for that reason but also because so many FX brokers want to launch new businesses here” explained Mr. Amhaz.
It’s tough to argue the popularity of the region. Take aside the regulatory environment, just driving down the road in Cyprus and seeing the number of technology, payments and compliance firms specific to this market is astounding. Anyone who attends a conference in Cyprus can also attest that it has truly become a melting pot which has assimilated the retail trading service industry into one location.
“Local access to a variety of service providers has its benefits. I have seen many companies complete a full set up in a very short time, including regulation, technology and skilled human resources. As a technology provider, being close to this environment will be beneficial to oneZero.” said Mr. Amhaz.
Beyond Brokers – Cyprus access to key technology partners
It’s to be noted that the recent expansion of oneZero’s business into Cyprus does not only appear to be centered around access to brokers. oneZero has also begun working more closely with MetaQuotes (who’s headquarters happens to be in Limassol), as announced recently by both firms. This news has been well received by the industry, as cooperation between MetaQuotes and third party developers has been an area of concern in the past.
When asked about the recent work between MetaQuotes, Interactive Brokers and oneZero, Mr. Ahmaz noted “We are quite excited to be working closely with MetaQuotes, and have more projects in the pipeline. With the MT5 solution, coupled with our access to liquidity from Interactive Brokers and other DMA providers, our clients can have access to stock exchanges across the major financial centers of New York, London, Japan and Hong Kong which is a very interesting means of diversification of asset classes and expanding beyond just FX.” said Mr. Amhaz.
Ergonomics make a broker’s life easy – Cyprus brokerages becoming very discerning
With regard to the growth in popularity for the oneZero system by brokerages in Cyprus, Mr. Amhaz focused on the ease of functionality and reporting. “There are three major trends that have occurred in Cyprus recently that are driving adoption of oneZero’s systems” he said.
“(1) a continuous increase in brokerage independence, and desire for brokers to be able to operate and manage their systems independent of their technology provider,
(2) the ability for brokers to have increased transparency and business intelligence on the back-end of their trading systems, for both regulatory reporting and client analysis, and
(3) access to new multi-asset trading platforms such as MT5.”
“oneZero’s settings system allows brokers to operate our software completely independent of oneZero, with direct access to execution controls, routing rules and liquidity settings in real-time. Our reporting system [ARMS] has always been a huge selling point for oneZero and Cyprus brokers are under increasing pressure to have transparency in depth into every execution. Lastly, our work with MetaQuotes and investment into MT5 is paying off significantly as we see MT5 adoption grow faster than ever in the second half of 2016.”
This led to a very important point, that being whether brokerages in Cyprus are now emulating those in highly established financial centers in Asia, Britain and North America in that direct market access is now becoming the norm.
“I believe that in Cyprus, because it is still growing as an electronic trading center despite there already being a vast number of retail electronic brokerages, we need to serve all the clients in this sector. oneZero can help them grow their business as we are connected to over 56 liquidity providers and Tier 1 banks globally, including the largest list of multi-asset based providers.” said Mr. Amhaz.
“oneZero has a strict policy to act outside the market, as a pure technology provider” – Louay Amhaz, Business Development Manager, oneZero
Have brokers in Cyprus moved away from the market maker model?
Mr. Amhaz spoke with regard to the evolution of trade execution among retail brokerages in Cyprus, and when asked whether internalization and creation of markets by individual brokers is going away, he answered:
“It’s not that brokers will not be internalizing anymore, they will certainly continue to do so, but the way brokers internalize risk is changing drastically. Internalization will still be a requirement for many firms, as credit conditions become more challenging. The difference will be in the tools that brokers use to manage these internalized trades.”
“Offering a full system which includes the safety of a risk management solution is therefore very important, especially if a broker needs to do any internalization or switch a client from A to B book on the fly. With oneZero, if a broker sees a high risk trade, they can go onto the GUI and switch the client from A to B book in seconds.” – Louay Amhaz, Business Development Manager, oneZero Financial Systems
“In addition to the execution and risk management benefits, low latency dedicated connectivity such as what is provided by oneZero in our New York, London and Hong Kong data-centers will help brokers protect themselves from scalpers. Having your trading system, connectivity solution and liquidity provider located in same venue is the best protection against many types of toxic flow. We also do our best to optimize the broker’s connection to their end clients, with dedicated connectivity into China and other key regions.” he explained.
“In conclusion, when it comes to the warehousing of trade risk, many retail brokers are now internalizing according to sophisticated rules, and a real market price feed, which resembles the more sophisticated approach seen in the institutional space.” Mr. Amhaz concluded.