Institutional FX veteran Michael Davies leaves the industry
After an illustrious and well documented career which span over 15 years at the very pinnacle of the FX industry, Michael Davies leaves the business completely after being offered an opportunity to join Snowflake Computing, a financial technology company in another sector.
Today marks yet another very poignant milestone in the life and times of the FX industry worldwide, as one of the most well recognized and highly experienced professionals has left the industry completely.
According to sources close to the matter, Michael Davies, who spent thirteen years at Sucden Financial’s London-based eFX division which provides prime of prime brokerage services to retail FX brokers globally, has been selected as Director of Sales for UK and Ireland by a company called Snowflake Computing which majors in financial technology development, and has taken the opportunity to progress his career forward whilst building on his tremendous knowledge of the electronic trading business.
An evergreen stalwart of the FX world, Mr Davies is widely known as a senior professional across many sectors in all regions of the world in the FX business, and has spent the vast majority of his career at Sucden Financial until October 2018 when he joined London-based prime of prime brokerage Stater Global Markets to work alongside long term associate and friend Ramy Soliman, who founded the company in 2016 with senior roles at IG Group, Citigroup and Integral Development Corporation having led to his establishment of a new and highly avantgarde prime of prime brokerage in London’s financial district.
Speaking to Mr Soliman this morning on the departure of Michael Davies from the industry, Mr Soliman told FinanceFeeds “I have known Michael for over 15 years and he is without doubt one fo the most experienced and capable professionals in this industry.”
“He has been given a very good opportunity to progress himself even further and has actually made the decision to accept it and in doing so has left the FX industry, which marks a new point in his career after such dedication to our business sector” said Mr Soliman.
“Whilst we are sorry to see him go, I am pleased for him and wish him well. We parted as good friends and the decision was purely Michael’s as he saw the chance to move to a financial technology company outside our sector as a great step forward for his future” said Mr Soliman.
Mr Soliman explained that Stater Global Markets has not yet selected a replacement for Mr Davies, whose position within the the company was Global Head of Sales, however Stater Global Markets has made strident moves forward since its establishment in 2016, having appointed senior executives with longstanding careers at major companies, not unlike that of Mr Davies.
In the middle of last year, Stater Global Markets appointed Mark Chesterman, IG Group’s Head of Institutional Business as Chief Operating Officer, who, during a meeting with FinanceFeeds in London at the time explained “Having run IG’s liquidity from both the buy- and sell-side, I understand that the primary requirement for a retail brokerage is to have stable access to the underlying market.”
“Risk management is critical in all financial services, and a brokerage that cannot offset their risks at any and every point in time is playing roulette with the future of their business. At Stater the platform has been built to ensure stability, but we also have fantastic agility that enables us to react to new challenges, be they regulatory or otherwise, that our clients may have. I look forward to working with the great team Stater have to further develop the platform, allowing clients to deal multi-asset with a true Prime of Prime, enabling them to take advantage across the board of a broker invested in the client’s trading success, rather than the broker’s” said Mr Chesterman.
Subsequent to his appointment, Mr Davies joined the company, which demonstrated the ability to attract good talent away from long term careers at major London-based firms.
Mr Davies will be well remembered for his depth of knowledge in eFX, especially around ensuring that brokers work safely and carefully when managing counterparty risk, something Mr Davies is an expert in.
Just after the Swiss National Bank famously removed the peg on the EURCHF pair in January 2015, creating a tremendous amount of volatility which cost some brokerages their business, Mr Davies told FinanceFeeds “One reason that counterparty risk has become a very critical point for examination is that many retail FX firms put faith in their Prime of Prime broker, understanding that all order flow and risk management would be effectively outsourced and conducted by that entity.”
“After a year of low volatility, the Swiss National Bank created a storm akin to raising a spinnaker in a force 9 gale, which not only saw the end for many retail firms, but also some prime of prime brokers as there was not enough collateral at hand to be able to manage such a sudden bout of market turbulence in the vast majority of cases” said Mr Davies at the time.
“Going forward it is essential to consider whether the liquidity provider a broker works with is able to survive an extreme market event. We have been surprised at how many Prime of Prime brokers seem to have only a few million dollars of capital, which would hardly leave them capable of surviving even a relatively small loss” said Mr. Davies.
“Post SNB the banks and Prime Brokers are reviewing the financial strength of many of the companies they are working with and are continuing to cut the facilities of many of their broker clients who do not meet their ever increasing minimum capital requirement” he said.
FinanceFeeds wishes Michael Davies a very good and prosperous career, and what is a loss to our industry will no doubt be an asset to the one he joins.
