de | cn | ru

Brokers News

FxPro Celebrates One Year as a NDD Forex Broker

It has been a year since FxPro said bye-bye to market making and switched to agency model (time flies, doesn't it!). Twelve months later, the broker looks back and shares with us its experience and evaluates its decision.

 

 

Switching to an agency model: the reasons

 

When we first heard about FxPro moving on to a No-Dealing-Desk (NDD) model, we figured the reason for that was improving the company's image and increasing its credibility – and as it turns out, we were right. The broker points out the four main reasons about its decision, and all these reasons ultimately lead to helping the company establish itself as a market leader. 
 
The first and foremost driving power behind the transition was the conflict of interest with the traders, that the broker wanted to avoid. As you probably know, market makers trade directly against their clients, whereas NDD/ STP/ ECN brokers act as mediators, making money by charging a commission on every trade or adding a markup to the spread. This way, the broker doesn't care whether the traders win or lose, as it collects the same commission/markup for the transaction – and this has lead the general public to perceive them as more honest than market makers. 
 
Another reason for FxPro to change its business model was its goal to improve trading conditions. The broker established co-operation with a number of respected liquidity providers, ten of the world's biggest banks, so that it can offer tighter spreads. As FxPro shares, establishing the perfect liquidity pool proved to be quite challenging, but the broker managed to do it – and its growth during this past year is a proof of that. 
 
Regulatory requirements also played a role in FxPro's transformation – the agency model has proven to be more transparent, therefore more favorable in terms of regulatory compliance. 
 
The last factor for the broker to leave its market making days behind was, as FxPro calls it, “simple business sense”. The company decided to focus on building a sustainable business model and on its execution efficiency, rather than spending enormous amount of time and effort on risk management and market volatility – something that every market maker does. 
 
 
 

The technological goals

 

Technology-wise, there were a few things the broker wanted to accomplish, the first one being reducing latency as much as possible, achieving levels of milliseconds, and virtually eliminating slippage. Furthermore, a system was set in place for keeping all pending orders on FxPro's servers until triggered – which is particularly useful during news releases and high market volatility (at such times, market makers delay orders for a few seconds and traders suffer losses due to slippage). 
 
Obviously, the transition wasn't challenge-less for FxPro, however the company did its best that it went as flawlessly as possible for its customers. Apparently, the transition of the business model led to a change in the broker's customer base: the new model began to attract traders who were looking for a long-lasting, reliable relationship with their broker, rather than jumping from one brokerage to another in search of the best offer. What is more, with its NDD execution model, FxPro was finally able to welcome traders who employed trading strategies, which market makers frown upon: robot traders, scalpers, etc. 
 
 
 

The results: Ca-ching! 

 

And all this paid out. As FxPro's shares, client profitability improved significantly for the last year, and traders using expert advisors (EAs) were the ones who achieved the greatest success. To enable them further, the broker introduced Quant – a drag-and-drop strategy builder that lets even those without programming skills develop and test their strategies. For the traders who prefer the cTrader ECN platform, the broker supports the cAlgo auto-trading platform.
 
 
 

The future

 

With all this that FxPro has achieved for this past year, we're eager to ask what's next – and the broker promptly answers: 
 
“The coming year is also likely to see further change in the industry. The recent crisis in Cyprus will be a factor for some smaller firms based in the country. We have always valued the security of our clients’ funds, protecting them within segregated accounts at global investment grade banks. We also gained a full FSA (now FCA) license for our UK operations as a way of offering further peace of mind to our clients. More brokers are likely to contemplate a change to an agency model of order execution, as the industry moves towards viewing this as the norm, aided by education, technology and most likely nudged there by potential regulatory changes”. 
 
With this said, there's nothing left for us except for pat FxPro on the shoulder and congratulate it on a job well done. 
TAGS: forex broker  forex trading  FxPro  forex regulation  forex platform  forex  NDD  market maker 

More news about FxPro

Broker Country Regulation Platform Min Deposit Review
Cyprus, UK, Mauritius CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
Cyprus, Australia CySec, ASIC MT4, Web,
Mobile app
$100 Review Website
Australia ASIC MT4, MT5,
IRESSTrader
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia FCA, ASIC MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website

More Forex Brokers News

FXTM appoints Han Tan as a Market Analyst for Southeast Asia region

Apr 19 2019 13:28:36

  Global award-winning forex broker FXTM has just announced the appointment of Tan Chung Han (Han Tan) as a Market Analyst. Read more

FXTM gets a license from Mauritius’ FSC

Mar 28 2019 09:59:36

  Award-winning forex brokerage  FXTM (ForexTime) continues its ongoing global expansion. The broker announced it has acquired a license from the Financial Services Commission (FSC) of the Republic of Mauritius previous week. Read more

Fortrade is the first broker to get an ASIC license in nearly 2 years

Mar 20 2019 15:03:35

  Fortrade acquired a financial services license from the Australian Securities and Investments Commission (ASIC), which hasn’t been very welcoming of new retail forex broker applicants lately. Read more

FP Markets launches a suite of cutting-edge MT4 tools for traders

Mar 06 2019 14:31:42

  FP Markets, a market-leading Forex and CFD provider, launches MT4 Trader Toolbox, a suite of twelve online trading tools which will take their clients’ trading to the next level. Read more

Major broker IG launched its US website

Jan 31 2019 13:15:37

  Global brokerage IG launched its website intended for US retail clients (www.ig.com/us). Residents of the US (with the exception of those in Arizona or Ohio) can now register on the broker’s website in less than 5 minutes and start trading. Read more

FOREX.com announced important updates to its Web Trading platform

Jan 25 2019 15:13:43

  Major forex brokerage  Forex.com  proudly announced important updates of its in-house Web Trading platform, which will take your trading experience to the next level.   Accessible from all browsers and operating systems, Web Trading was launched in 2017. Read more

HotForex parent gets licensed by UK’s FCA

Jan 21 2019 12:31:59

  Less than a month after HotForex acquired license to operate in the UAE, the trading services provider gets an authorization by the Financial Conduct Authority of the UK. The UK subsidiary of the HF Markets Group, HF Markets (UK) Ltd. Read more

Rakuten Securities offers HK$700 prepaid cards as a welcome gift

Jan 18 2019 10:26:57

  Hong Kong forex broker Rakuten Securities offers up to HK$700 Spending Limit Prepaid Card as a welcome gift to new account registrants. Here are all the details you need to know about the company’s promotional offer, which is valid from now until the end of March 2019. Read more

XM applies for a forex dealer license in the US

Jan 11 2019 13:39:14

  The US subsidiary of major forex brokerage XM has applied for a membership with the National Futures Association (NFA). This became clear from a filing by the broker’s US entity Trading.com Markets Inc. (previously Trading Point US Inc.) with the NFA dated January 3, 2019. Read more

HotForex acquired DFSA license, commences operations in the UAE

Jan 08 2019 10:45:37

  HotForex is now licensed by the Dubai Financial Services Authority (DFSA) and announced it commences operations in the United Arab Emirates (UAE). The Dubai arm of the HF Markets Group, HF Markets (DIFC) Ltd., acquired the DFSA license in December last year. Read more

de | cn | ru