“Mind The Gap!” – The life and times of a man on the move Episode 21

The candid camera, Demetra Kalogerou and the offshore tug of war, an Australian industry networking surprise, The FinanceFeeds Sydney Cup and James meets the Prime Minister

In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.

Monday: For short videos, it could be time to GoPro

The media age has well and truly matured, and as a result, new, quick and interesting methods of keeping your brokerage or electronic trading-related products and services in the eye of what is now a very observant and keen audience are required.

Long gone are the days when a quick 1 minute video filmed on a hand-held smartphone would be anything like sufficient or professional enough to garner any form of quality attention, that phase having become obsolete and passe almost as quickly as it materialized. Thankfully so, too, as the often loud, pumped-up junior level ‘bloggers’ who attempted what had become known as ‘VLOG’ (Video Blog) efforts via a smartphone were as crass as their utterings, which were often peppered with colloquialisms that do not belong in a media studies campus at a low-end polytechnic, let alone in material representing a financial services company.

Thus, rightly or wrongly, I have stuck firmly to the view that the only way to create televised material is to have it produced professionally and correctly, in the right surroundings and convey a quality image.

High quality cameras such as the GoPro could revolutionize your company’s corporate image

Not all firms have the resources or the time for this, however, but nowadays there is a solution and I think it is worthwhile, that being the new range of 4K cameras that are available with almost studio-like recording quality, that can be operated very easily by one person who is actually featured in the resultant video.

To raise and maintain the profile of a company that either provides brokerage services to a retail and professional trading audience, or a company that develops systems and ancillary services for brokerages and forms an important part of the structure of our industry, I have long been convinced that the need for televised broadcast is vital, especially when considering that we are in a technologically-led online business.

Video lends a face to the name, personifies the company being featured, and is far more effective than written LinkedIn updates or colorful slogan-based updates on such social media sites. On Monday this week, I had a good look at some new products that companies in this industry could well benefit from using.

For $400, a very high quality camera such as the GoPro can be bought and used by any member of staff in the company, the result appearing almost professional in its sound and vision quality. It can be operated via an app on a smartphone meaning that there is no need for another member of staff to stand by the camera and operate it, meaning that industry executives can literally create short videos on the fly, whether at conferences, events, in their office or at the end of the development of a new product.

These videos can then be circulated as PR material across all channels, with just a few seconds needed to add some text at the bottom via its own software to create name and title information and a short description.

Videos are the future for presenting products and services, especially in this age of on-demand internet-based content, hence I think this is probably $400 well spent.

Tuesday: Offshore or onshore? No man is an island!

Times are definitely changing in Cyprus, especially with regard to how the structure of the financial services sector operates in the island nation.

It is quite a remarkable feat that a small island in the eastern Mediterranean sea with a total national population of less than 1 million, whose traditional business sectors have been tourism and shipping, has become globally recognized as a center for retail electronic brokerages, with over 150 regulated Cyprus Investment Firms using the island as their base from which to approach a global client base.

It is perhaps even more remarkable that this disproportionately high number of companies compared to the size of the country and diversity of its workforce has been in that position for over ten years.

Indeed it is, Demetra…

Whilst it is clear that for all of us within the FX business are continually working closely with firms based in Cyprus, it is necessary to look at the difference in business model between Cyprus-based FX firms and their counterparts in other regions.

The main reason why Cyprus has become such a destination for retail FX brokerages is its inclusion within the European Union, and the national regulatory authority, CySec’s consequent inclusion within the European MiFID and EMIR regulatory structure which aligns it with larger mainland European marketplaces and, perhaps even more prestigiously, Britain’s coveted Financial Conduct Authority (FCA).

Of course, there is no way that a small company with just a few sales staff and a white labeled MetaTrader platform based in Cyprus can be compared to the 30 year established giants of London with their own proprietary systems, public stock listings, their own intellectual property and loyal domestic market client bases, but that is almost irrelevant to their business model, as the majority of firms in Cyprus are using that association of prestige in order to market their services to client bases several thousand miles east of the European continent.

This in itself has been a moot point for bureaucrats in the European Parliament, many having stated that regulation of financial markets is for European firms to provide security to European clients, and is not a marketing tool to be used on websites before bringing non-European clients on board and placing their business via offshore entities.

We of course all know that this is becoming an increasingly popular practice as the noose of regulation continues to tighten around the arteries of the smaller brokerages in Cyprus which have sprung up via marketing-led lead buying activities rather than any association with financial services or technology, however it is now a matter of discussion within the chambers of the bureaucrats which has led to it getting onto the radar of firms like Ernst & Young, Deloitte and believe it or not, the Bank of Cyprus.

This week, a forum was held in Cyprus, led by some of the senior executives of banks and professional services firms, looking at the sustainability of what Nicosia-based executives are calling “the offshore model”.

The mantra of the forum was that the professional services sector in Cyprus has experienced unprecedented growth over the last 30 years and slowly but steadily became a vital part of the island’s economy. The biggest stakeholders in the industry (large counting/audit/tax firms, well-known law firms and the banking divisions of Cyprus banks) have traditionally depended on their business with international clients – both corporate clients and high network individuals – to maximize their growth. Nevertheless, new regulatory requirements and the latest developments regarding tax incentives in different jurisdictions means that it is time to reconsider things as these changes start to impact business with overseas.

The main question asked was “Is it time to start working on a new business model that will enable the professional services industry in Cyprus to flourish again?”

Less than one million people live in Cyprus, however the FX industry employs over 7000 people from all over the world, largely centered in Limassol.

Indeed, many professional services firms have become intrinsically involved in the business of FX brokerages, largely because of the ‘packaged’ nature in which Cyprus was sold to many firms. I can remember 10 years ago when it was commonplace for management consultancies and law firms to promote turnkey solutions for any person from literally anywhere in the world, at the time many of which had never run a brokerage before, to simply pay a small fee, and have a fully licensed up-and-running FX brokerage.

The mere inkling that these firms are now looking at new regulatory implementations which may impact their business – for that read the MiFID II and leverage restriction-driven strangulation of smaller CySec firms, means that a change is on the way and I believe very certainly that there will be a major consolidation of retail firms in Cyprus very soon.

Demetra Kalogerou, Chair of CySec, has made some rambling entrances in the past, one of which was the subject of my dissemination last year, did indeed look at how the ‘offshore model’ in every sector in Cyprus may well have to change.

The upshot? It is likely that many firms with offices in Cyprus will maintain them but remove their licenses and simply onboard clients from other regions via offshore entities in the Caribbean, thus doing business exactly as they do now but without the European regulations which they see as shackles, and once a certain percentage of a financial services sector in a country bound by respected regulators begins to see its own sustainability network as a shackle, the real mindset is exposed.

Wednesday:  There’s networking, and then there’s networking!

I am quite sure that my own personal time clock has taken something of a substantial bashing over the years, however there is nothing that exacerbates this than a trip to Sydney, the 5th journey of that nature that I have made in the last year and a half having taken the usual two days to land on New South Wales soil.

Australia is a fantastic country in pretty much every respect, and in terms of business and culture, it is world-class, the FX industry in the Andipodes representing some of the finest examples of quality in the entire industry.

Daniel Byrne, CEO, easyMarkets Australia

Its proximity to the Asia Pacific region has positioned it in a very favorable light, its future being the marriage of Australian sensibility, pragmatism and top-drawer corporate ethics with the institutional prowess of Singapore, the hedge fund-dominated Hong Kong, the institutional give-up business of South Korea and the giant financial technology appetite in China.

Quite simply, Australia is the future, and it shows every single time the wheels of the 747-400 touch down at Sydney airport.

Whilst the marriage of western technology and business ethics, the anglophone cultural similarity to far-away London and the quality of Australia’s executives and regulators is a recipe for success, I was introduced to a different type of marriage that can emanate from Australia’s corporate network on arrival in Sydney.

Meeting with Daniel Byrne, CEO of easyMarkets Australia in the unmistakable backdrop of Sydney’s Opera House, it was explained to me that our FinanceFeeds Sydney Cup events are of tremendous value, with more than a degree of gratitude.

Affable, polite and professional Mr Byrne, with over 10 years of senior level experience in the industry having held executive positions at GFT and AxiTrader before joining easyMarkets in 2017 to lead its Australian operations, explained to me that he had actually got engaged recently, having met his fiancee at our Sydney Cup FX Industry Networking Event two years ago.

I would never expect such a remarkable outcome!

We will indeed be continuing to run the Sydney Cup event, the next one being in February 2019 in Sydney! Details to follow very soon….

Thursday: Sydney is the retail FX industry’s flagship

Think London, think large publicly listed retail CFD and FX giants. Think New York, think GAIN Capital. Think Chicago, think derivatives exchanges and a long history of equities and commodities.

Think Sydney, think astute, high quality leadership and polished retail FX firms with massive, loyal client bases, top quality leadership and an enviable position on the map.

This Thursday, at the Establishment in George Street Sydney, FinanceFeeds held its fifth Sydney Cup FX Industry Networking Event, with over 170 registered attendees from top quality companies across the world.

Gold-i CEO Tom Higgins with Stater Global Markets senior executive Michael Davies at the FinanceFeeds Sydney Cup on Thursday, November 22

During the course of the evening, senior executives from across the entire industry, representing some of the world’s most respected FX brokerages, platform development companies, legal and regulatory reporting firms, institutional liquidity companies and ancillary services providers engaged in enthusiastic and important business development, demonstrating a continued need for commercial networking to take place in Sydney for this business sector.

Sponsored by specialist financial technology and platform integration company Gold-i, the event commenced with a keynote speech by Gold-i CEO Tom Higgins who looked ahead at what the developments will be over the next ten years, which is a very long period of time in this fast-moving business, and is symbolic, with Gold-i having recently celebrated 10 years since its establishment.

I would like to thank all the professionals who attended, it was absolutely super to see you all and I look forward to hosting you all again in February.

Friday: The executive and the Prime Minister

Australia’s economy is one of the most recognized and respected in the world. It is diverse, highly successful and is a global trading partner with pretty much every nation internationally, positioning the country at, or near the top of pretty much every OECD nation comparison from almost every think tank on matters from banking to manufacturing to mineral extraction to education.

The country also holds a well-earned and enviable reputation for being one of the most honest and least corrupt nations on the planet, hence Australia can genuinely be considered to be a true meritocracy.

Thus, having the ability to socialize with senior government officials is perhaps a deal harder in Australia than it would be in some other regions of the world, and therefore can be considered a privilege to those who have achieved this, and actually a testimony to the level of professionalism displayed among those who lead our industry in the land down under.

On Friday, I spoke at length with James O’Neill, who is a qualified lawyer with his Master of Laws alma mater being from University of Sydney, and Executive Director of Fair Markets (formerly ILQ).

James O’Neill with Australia’s longest serving Prime Minister, John Howard

Mr O’Neill, who became a Graduate Member of the Australian Institute of Company Directors last year, detailed his interactions with two of Australia’s longest serving premiers, John Howard and Tony Abbott.

Mr Howard, who served as the 25th Prime Minister of Australia from 1996 to 2007, therefore being the second-longest serving Australian Prime Minister, behind only Sir Robert Menzies, who was in office for over 18 years. Prime Minister Howard was leader of the Liberal Party from 1985 to 1989 and from 1995 to 2007, and Mr Abbott, the 28th Prime Minister of Australia from 2013 to 2015 and Leader of the Liberal Party from 2009 to 2015. He served as Leader of the Opposition from 2009 to 2013. Abbott was first elected Member of Parliament (MP) for Warringah in 1994.

It was of great interest to gain an insight into the personalities of the two leaders, with Mr O’Neill explaining “John I have only met a couple of times but is someone whom I have much admiration. Tony I know very well and I actually ran for vice Chairman of his governance board but missed out by eight votes.”

From the perspective of our industry, which is a leading-edge technologically focused business which is often responsible for making tremendous advances in the entire financial markets system, it is encouraging indeed to see commitment from executives who have interests in furthering the cause of pragmatic policy as well as making innovations in one of the most important business sectors in the world.

Very good work James, keep it up!

That concludes a very interesting week indeed, and as I sign off here at my desk for the week which is in Johannesburg, South Africa, I wish you all a super week ahead.

Read this next

Digital Assets

Paxos opens R&D center in Israel to focus on transaction signing and crypto custody security

“Paxos is looking to expand its team in Israel in 2023 and beyond, giving engineers the opportunity to work on cutting-edge financial products and shape the future of the global economy.”

Executive Moves

Stash appoints Liza Landsman as CEO to further grow investing app

Stash is an investing and banking app with over 2 million active subscribers. Its subscription plans start at just $3 a month, and offer a range of products including investing, banking, education, and advice.

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”