iFX EXPO Dubai: Equiti Capital’s Head of Brokerage Sales shares the company’s journey to success

Rick Steves

FinanceFeeds went to the United Arab Emirates last week to meet the trading industry leaders for the first time since the pandemic at the iFX EXPO Dubai. Being face-to-face again was a memorable experience that attendees will carry with them for years.

Among the leading event-goers were the Equiti Group team representing the well-capitalized, multi-asset, and financial trading brokerage with a unique operating structure.

FinanceFeeds’ Nikolai Isayev spoke to Mohammad Isbeer, Global Head of Brokerage Sales at Equiti Capital, to learn more about the broker’s recent moves in times of great change and challenges, from market volatility to the rise of emerging markets and asset classes.

Mr. Isbeer shared Equiti’s secret sauce of leveraging its unique local touch to better address market demand for a more comprehensive suite of financial investments and expand its product offering and support services.

Be the first, be local

“From the start, we’ve always had that approach in mind: a global company with a local presence. It’s part of our business model”, he said, as we discussed the high number of licenses from regulators across the globe and their importance to the company’s business model. Equiti Group’s global footprint includes local offices in Europe, the Americas, the UK, the Middle East, the Levant region, Africa, and the Asia Pacific regions.

“We do have a wide range of licenses, from the ‘usual suspects’ to emerging markets that really need help from the infrastructure standpoint. When Jordan started issuing licenses, we were the first acquiring broker”, Mr. Isbeer said, explaining that being a first mover is part of the firm’s DNA.

“After the success in Jordan, we were the first to engage regulators in Kenya. So, when we started our operations there, we saw traders flocking to open accounts”, he said about Equiti’s subsidiary EGM Securities, which became Kenya’s first online trading broker to obtain a license from the Capital Markets Authority in early 2018.

EGM Securities has recently launched derivatives trading on the NSE (Nairobi Securities Exchange) Derivatives Market; being the first online broker to offer these products in Kenya. Again, being the first is in their DNA.

The Kenya-based broker also offers in-person financial education at its Nairobi and Nakuru offices as well as other educational offerings like regular seminars and training webinars for free. “When you are local, it’s the face-to-face that’s important. This is our approach, giving in-country support to the market”, Mr. Isbeer continued.

Moving the topic to Equiti’s ability to provide broker clients with targeted and local solutions, from payments to banking and custody, Mr. Isbeer explained that B2B solutions are offered mainly through its FCA-regulated entity, Equiti Capital. With some B2B clients also being onboarded under their other regulated entities. “Until now, the regulatory environment hasn’t allowed us to deal much on the B2B side with Payments Service Providers”.

“From the B2B side, the main demand is for cryptocurrency deposits. Crypto solutions pose certain risks, but we’re trying to find the best possible way to serve our broker clients while complying with the regulatory framework” he said. “At the moment, retail brokers are dealing directly with PSPs, and it’s their responsibility to make the transfers to the respective bank accounts.”

Crypto payments are a big deal now, and Equiti Group is on top of the game, but the current regulatory uncertainty regarding cryptocurrencies is hampering adoption.

“For now on the B2B side, Equiti relies more on credit lines. We offer pre-approved emergency credit. It’s a temporary solution. We don’t really like it but it’s the only option at the moment as we hope to address crypto solutions for brokers within the next months, where regulation permits”, he said.

The Global Head of Brokerage Sales at Equiti Group also mentioned how the firm is heavily invested in AI and machine learning via a partnership with the Royal College of London and its incubator, Algo Labs.

The products developed there with the help of Professors and students have been mainly for its proprietary risk management and pricing engines, which directly benefit clients, but the firm also intends to roll out other innovations to brokers and improve their experience in the future.

Liquidity, the pandemic and social trading

The dynamic adjustments of risk books and a fluid adaptation to brokers’ needs in terms of liquidity, credit lines, and trading limits have become a major concern for B2B clients since the pandemic.

Retail brokers like to internalize the fill and the pandemic-driven market was having everyone reaching their limit. “Even us as a liquidity provider, we’ve seen a lot of incoming fill”, Mr. Isbeer said about the “tough times” that were successfully dealt with.

“We pride ourselves in having continuous communication with our clients: telling them about the changes that are happening in the market and the volatility we’re expecting. Also, we adjust our risk book models.

Our risk management team did a phenomenal job as it was always updating the risk to the economic calendar, monitoring the vaccine roll-out, and other pandemic-related news, as well as updating margins in anticipation of gold spikes and negative oil prices. All this while working from home.”

Equiti’s bespoke liquidity is offered via FIX API from Tools for Brokers, Prime XM, oneZero Financial Systems, and others, so that broker clients can choose their liquidity providers from the widest range of options.

Mr. Isbeer points out the importance of a customizable service with flexible connectivity. “It costs a few dollars per million but it is very much worth it” as Equiti uses two Prime Brokers and numerous liquidity providers.

Equiti has recently deployed Lucera LumeFX technology, an industry-leading FX aggregator known for its low latency execution and expansive connectivity to the FX market.

Recent partnerships with FXCubic and Your Bourse also helped the firm stay ahead of the curve in terms of liquidity solutions and prime management systems in a time where stable pricing and liquidity are perhaps the most important factor across the globe.

As the interview drew to a close, Nikolai asked Mohammad Isbeer his view on social trading, its challenges and opportunities. “It’s one of the most challenging stories in the last few years. The industry believed big funds were the market movers, but now small traders are changing everything with simple tweets.

“The element of surprise was really important, so I highly doubt it will happen again especially in the FX and metals space, although equities are still more prone to it as liquidity on both sides is not equal.”

Brokers need to up their game regarding the risk team“, he said, pointing out that Equiti offers a specific suite of equities, the ones more in demand, but “the trend is to offer as many products as you can”. So, “you have to have risk management and understand what really is going on in the market”. On whether social trading is here to stay: “the future is going there. It will be the standard in about three to four years and we’ll all be used to it.”

iFX EXPO Dubai was the first live industry event since the pandemic and reminded everyone how being face-to-face is important and key for healthy relationships, networking, partnerships, and business growth.

Read this next

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<