No giving all your broker’s data to China? Jack Ma shoots himself in the foot

Alibaba internet monopolist Jack Ma tripped himself up, meaning that your FX brokerage’s IP may well be safe from Chinese grip

Last month, FinanceFeeds warned of the perils of allowing gigantic Chinese upstart ANT Group to enter a very unusual IPO on the Shanghai Stock Exchange, valued at a tremendous $34 billion, and how this, led by Alibaba internet monopolist Jack Ma and of course by default the Chinese Government, would unleash Chinese domination across the free market world, and give the government all of your brokerage’s intellectual property.

Fortunately for Western businesses, China’s illiberal and totalitarian approach to business works both ways, not just in favor of the Chinese magnates that fuel it.

ANT Group, owned by Jack Ma himself, is a Chinese financial technology company whose remit is to create the infrastructure and platform to support the digital transformation of the service industry, whilst seeking to enable all consumers and small businesses to have equal access to financial and other services that are inclusive, green and sustainable, had finalized its IPO value last week, constituting a world record value.

the price for the Hong Kong part of the listing is expected to revealed later in the week ahead of the listing early next month. “This was the first time such a big listing, the largest in human history, was priced outside New York City,” Mr Ma said at the Bund Summit. “We wouldn’t have dared to think about it five years, or even three years ago.”

Back in July this year, FinanceFeeds reported the company’s initial wish to go publicly listed, a very rare thing for a Chinese firm, and an important point as this addresses the transparency issue usually associated with doing any form of business with companies behind a communist iron curtain, and demonstrates the firm’s monopolistic aspirations in global markets.

At that time, Eric Jing, Executive Chairman of ANT Group, said “The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development.”

“Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders and regulators. Through our commitment to serving the under-served, we make it possible for the whole of society to share our growth,” Mr Jing added.

If it is so difficult for Western fintech firms to gain dominance and become bigger than banks, how is it so easy for this upstart to simply come in and take over?

It is highly likely that in the future, we will all be using ANT for various components of electronic trading, be that reporting, back office, client interaction and connectivity to service providers.

AWS already has done this by sidling up to regulators so that all regulatory reports have to be submitted via Amazon’s AWS cloud solution, thus if a broker takes regulatory reporting services from a specialist regulatory technology firm, reporting to regulators will by default be done via AWS. A clever move, however the battle between Amazon and Alibaba, both odious entities in my opinion, is hot to the point where Mr Ma will want total control.

The question is, do you want your company’s data owned and stored by a firm which is owned largely by the Chinese government, despite its huge IPO figure?

Well, now it may not be much of a concern, because Mr Ma opened his mouth, and opening one’s mouth in China is not usually the best idea, as it usually results in the government slamming it shut, and unlike in many other nations, untold personal wealth or seniority of position does not stop them doing so.

The Chinese Stock Exchange, owned of course by the state, took umbrage just a day after Mr Ma was summoned to a meeting of the country’s top regulatory bodies. This followed a critical speech by Ma in Shanghai, where he criticised the country’s fluid regulatory system and banks, accusing the latter of having a “pawn-shop mentality”.

In a short statement, the Shanghai Exchange said it was suspending the share offering due to upcoming changes in the regulatory environment that might make Ant fall short of listing requirements concerning information disclosure.

Shares in Ant Group were set to start trading in China and Hong Kong on Thursday, with the much anticipated float set to be the world’s biggest, after investors signed up for $37bn of shares.

Within an hour of the news breaking, the Hong Kong Stock Exchange announced that it would also suspend Ant’s IPO, citing the same regulatory concerns and effectively derailing the upcoming listing.

With any luck, the Chinese authorities and Shanghai Stock Exchange will stick to their guns, your data will remain safe, and a publicly listed monster run across the entire world by megalomaniac Mr Ma alongside an equally megalomaniac communist super-government won’t go around acquiring all of the other fintech firms that underpin the component structure of the FX industry worldwide which would mop up all data and intellectual property of the entire global capital markets business.

Yes, we in the FX industry have seen the hostile approach toward overseas business proffered by the Chinese government when attracting large IBs and brokers in China was a big thing among western brokerages and platform vendors, however it is reassuring to know that their kneejerk totalitarianism sometimes goes in our favor.

Read this next

Digital Assets

Voyager subpoenas FTX’s inner circle over Alameda loan

Bankrupt crypto broker Voyager Digital, represented by law firm Kirkland & Ellis, is seeking court approval to subpoena Sam Bankman-Fried’s inner circle, as well as Alameda Research’s former executives.

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

Industry News

HollyWally opens office in Portugal to bring B2B2C wallet-as-a-service platform to Europe

“We looked at a number of centers for startups throughout Europe and were attracted straight away to Lisbon. There is great Government support and enthusiasm for startups, it’s well positioned between our Asian and US offices, it’s a cost-effective city in which to base a fintech and it’s a beautiful place.”