The huge counterfeit MetaTrader 4 industry in China, and why it is good for Western firms

Non-genuine, pirate versions of the MetaTrader 4 platform are in widespread existance all across mainland China.

Today, at the iFXEXPO Asia 2016, hosted by ConversionPros and Finance Magnates, assisted by the experience and knowledge of Andy Zhang, Business Development Manager for China at Leverate, and Ted Lee, Senior Marketing Manager for the APAC region at Leverate, Andrew Saks-McLeod takes a close look at the prolific counterfeit MetaTrader 4 sub-industry that is prevalent across China’s mainland.

Mr. Zhang began by explaining “There are some local Chinese technology companies that provide non-genuine MT4 to small brokers in certain cities in mainland China. Many brokers know that it is a fake platform and it is a very low cost platform compared to the genuine one.”

Mr. Lee then added “This type of platform is very popular in the second tier cities in China (such as Zhengzhou, Shenzhen, Chengdu and Guangzhou) which are highly populated, and where people become rich very quickly and are looking to establish operations as a brokerage with a low cost solution to run a b book business for a short period of time.”

Joining Leverate’s APAC experts was Nicc Lewis, VP Marketing at Leverate, who then explained the extent to which this is actually beneficial to bona fide software vendors and brokerage solution providers.

“We know that there are a number of companies that copy the MetaTrader 4 solution that are geared toward the Chinese market.”

“After some time, they find out that there are serious problems with this business model and it is often completely unsustainable long term due to various issues such as lack of support and security problems in that it can be easily hacked. which means that leads belonging to other companies can be stolen and sold to other rival brokerages” – Nicc Lewis, VP Marketing, Leverate.

Mr. Lee sees the counterfeit platform industry as a very good opportunity and a breeding ground for developing business within Chinese brokerages, and specifically, good quality chinese brokerages which are looking toward a long term, more established modus operandi for their business.

“Ironically, many companies start out thinking they have got a ‘quick win’ situation due to low platform costs and the ability to internalize all trades, however the companies that are really serious realize that they need to seek a genuine solution so they reach out to us, therefore the fake MetaTrader 4 ecosystem is a breeding ground for good start up brokerages” said Mr. Lee.

Mr. Zhang said that there are still a series of less than salubrious users of counterfeit MetaTrader 4 platforms in China which begin their operations using a system that not only consists of a fake MetaTrader 4 front end in which the broker can change the time that a trade took place, the pricing, the order execution, and every possible setting in order to ensure that customers do not win.

He explained that usually fake MetaTrader 4 providers have their own server solution which is hosted in China and operated from an internal dealing desk with no aggregator and no liquidity. Mr. Zhang explained that in some cases, clients deposit to the brokers bank account via PSP, and in extreme cases, these firms then move client money to personal bank accounts.

Mr. Zhang said “This is why they come to us for a better solution. What is surprising is that some customers actually call to ask for a fake MT4 solution!”

Mr. Lee offered some very good advice with regard to how to check whether a brokerage is using a fake MetaTrader 4 solution.

“You can check whether a brokerage is using a fake MetaTrader 4 solution by looking at the genuine MetaQuotes register of companies that it supplies its platform to, and if it is not listed by MetaQuotes, then it is a fake MetaTrader 4.”

“We estimate that there are approximately 1,000 fake MT4 brokers across China” said Mr. Zhang.

In conclusion, Mr. Lee considers that in order to ensure longevity, genuine solutions are the only way forward.

“The government is now monitoring B bookers with a Fake MetaTrader 4 platform, therefore if they go for a real MetaTrader 4 solution from a real provider which is licensed in a Western jurisdiction, the government takes a better view as they know that there is some degree of protection for clients.”

Featured photograph: Ted Lee and Andy Zhang, Leverate’s APAC experts at the iFXEXPO in Hong Kong. Copyright Andrew Saks-McLeod