ISSUE #4 Vol. 1
Take That To The Bank Julian Kramer
The Capital of Technology
APRIL 2017
If Bots Ruled the World Paul Orford
Ron Finberg
A Global Career for a Global Industry
Japan's New Rising Son Takeshi Saito
Jonathan Baumgart
Super Mario
Mario Singh
The King of Diamonds Ludovic Vuillier
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Take that to the Bank Interview with CEO Julian Kramer
Earning industry wide respect with his indepth knowledge of the off shore industry. We find out more about what drives him.
Imagine this scenario: You, standing in a compliance office of a major Swiss Forex company as the country’s regulators are forcing the industry to its knees. On the phone you have an American client demanding to know whether their assets are safe whilst in front of you is an obdurate compliance officer who is trying to interpret the new laws. You know you must keep the client but you cannot ride roughshod over the new regulations; What do you do? This is the unique position that Julian Kramer found himself in 2008 and through those tumultuous times he played a key role in securing his company’s banking license whilst also managing his clients affairs. That experience started a journey which would take him to frontier markets in Asia and eventually the founding of offshorelicense.com. With its uniquely specialised CEO at the helm, offshorelicense.com is growing fast with twenty staff in Riga, Prague and Cyprus. Providing services from the obtaining of business licenses and bank accounts to the registration of virtual offices - the company is driven by Kramer’s knowledge of the ever evolving regulatory landscape. He is not here to give you hugs, he is driven by a desire to keep his clients one step ahead of the game. Paul Orford | Can you give us a background and how you got to become the CEO for offshorelicense.com. What is your background? Who have you dealt with? Why did you make the transition to running your own firm? Julian Kramer | I am a firm believer that there is no single country or sets of values ISSUE #4 Vol. 1
that can claim hegemony when doing business, so when I was shaping my career I deliberately tried to work in varied locations. After picking up a bachelors at the University of British Columbia in Canada I decided to do my Major at the European University in Switzerland. I maybe did not know it at that point, but Switzerland would play a major role in my 4
life and teach me an incredible amount about the inside workings of business and the way money moves around the globe. I arrived back in my home city of Riga, Latvia in 2002 with a great education and, as a young ambitious man, in need of a work. My first “real” job was for a holding company that supplied the majority of spirits to the Baltics. I have been described, probably fairly, as a natural salesmen on more than one occasion and, at that time especially, I was not adverse to spending time in a bar or two - which is why I quickly found myself in charge of Jaegermeister sales across the region. The job was a lot of fun and gave me great insight into the mechanics of what it like for small and medium sized business on the ground but I wanted something bigger, something to challenge me further. I needed a job which was more international in its outlook and I got this opportunity in 2005 when I joined the FX company Dukascopy in 2005. After only two years at the Riga office I was promoted to the headquarters in Geneva and this turned out to be my second period of great personal development in Switzerland. I dealt primarily with a number of large US asset managers but also worked with many Russian speaking clients which, by the way, taught me that although they like to think they are very different, they are actually almost identical when it comes to managing their affairs efficiently. Switzerland was a real hotbed for the FX community, there seemed to be a brokerage
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on nearly every street, and this was not good for traders because there were a lot of sharks. At the same time the politics in Switzerland started to shift and there was pressure on the government to become more transparent and, basically, to stop helping foreigners dodging tax. This was tremendously bad news for that murky pool of FX brokers, the majority of whom were crooked, and FINMA cracked down on them and in 2008 there number of FX brokers went from more than two hundred to just a handful. For Dukascopy to continue to exist it needed to become a bank. My job at this point became incredibly complicated. I had clients who were getting jumpy, worried about their assets. On the other hand, the company was going through a complex transformation into a bank. This exact moment is when I gained a unique insight into the nuances of regulation and licensing. I would literally get off the phone with a money manager and walk to the compliance department to discuss if what the client wanted was possible and if the answer was “no” I would get back on the phone and find a way to navigate the system. This is when I learned that there is always a way to work within the system. Sometimes you have to stretch the boundaries but if you have the knowledge then you have the power. They managed to get their Swiss banking license and then another fantastic opportunity presented itself to me. In 2010 I became the Head of Sales at FX 5
Open where I became responsible for both sales and business development. The company has a strong emphasis on Asia which again brought me into contact with a whole new way of doing business. Importantly, this was at the time when Malaysia began presenting itself as a viable place to do business for many of the companies which had been squeezed by European and American regulation.
the game and the majority end up losing their money. The regulators in Europe and the US can see that and their instinct is to ban or limit practices which they deem too risky. Even the big London-listed spread betters like IG and CMC Markets are coming under huge strain, seeing their stock price hammered, because the markets can see the regulators have their sights trained on them.
By 2014 I felt I had acquired enough experience and knowledge to start my own venture and that is what led me to set up offshorelicense.com.
This tendency, by the way, to want to control everything centrally is exactly the reason why I think we will see the European Union crumble in the next decade or so.
Paul Orford | There has been a radical shift in the relationships between new brokerages and banking. How do you see this going in the future, and how would you remedy this?
Paul Orford | So, if we have to steer clear of Europe, where do you go?
Julian Kramer | I remember when I did my MBA in Switzerland, no one could even imagine the country being anything but a place where money was syphoned in and then moved around in its opaque system. Transparency and regulation were not even on the agenda. And look at the place now. The country built on secrecy and discretion has been leant on by the US and EU to become more mainstream. This strong regulatory trend is continuing and any soft spots in Europe are coming under more and more pressure from Brussels. The FX and betting industries are particularly in danger because, lets face it, it is a risky business. Too many traders enter with just half an idea of how to play ISSUE #4 Vol. 1
Julian Kramer | Well, there are plenty of options but I think the most exciting destination is Malaysia and we have successfully helped many clients set up there. One message I want to stress is that things change really quickly. As an example, Belize was for a long time a favoured offshore location but new laws meant it was suddenly no longer a viable destination. We therefore worked quickly to find alternatives for our clients. Paul Orford | If you were a start-up, what direction would you give to a client in obtaining a license. Is there a specific jurisdiction that you would advise clients to use? Julian Kramer | The first question we always ask is the same as if you would walk into the local branch of your bank How much money do you have? If you 6
want to get fully licensed in Europe then you are going to need at least €1.5 million. If your budget is lower then things start to get more tricky but there are still plenty of options. As I have said before, Malaysia offers fantastic opportunities. You will need less than a hundred thousand dollars of starting capital and that money remains liquid at all times. The turnaround time is quick, around three to five months. That then gives you access to some really high class financial institutions. For example you can open bank accounts with Maybank which has something like 150 billion dollars in assets and if you don’t believe me, go to Singapore and look at the giant skyscraper they occupy there. It is a serious bank. We do expect some more stringent regulations there in September this year but we think it to remain an attractive destination and do you know what, if it is not Malaysia then it will be somewhere else. As I keep saying, I have seen it all before and we at offshorelicense,com always find a way. Paul Orford | How would you assist a client in protecting themselves in the future? What steps can they take? Julian Kramer | Here is a scenario which we encounter all too often. A client calls up in hysterics because their account has just been frozen. We then ask whether their other accounts have suffered the same fate and the answer is all too often, “What other accounts?” That is the problem right there. You always need multiple accounts and multiple licenses. We do not run a kindergarten. I am ISSUE #4 Vol. 1
pretty sure every culture and language has a version of; don’t put all your eggs into one basket. Look at Alpari. Google “Alpari Swiss Franc” and you will see articles by the BBC, Daily Telegraph - all the big British news outlets about how it has gone bust because they were caught out by the SNB. But Google will also tell you that it continues to trade. How? Because it is run by smart people with multiple licenses, so if things go wrong in one territory they can carry on with another. You also need to remember to move your funds sensibly. The one way to draw attention of regulators and annoy the bank is to receive a massive sum of cash into your account in the morning and move it on by lunchtime. Be smart. Also, do not be scared to run your business affairs as efficiently as possible. No matter the size or type of company you have the right to optimise your tax situation. Does anyone think that Facebook and Google register companies in Ireland because they like the creamy texture of Guinness? No, it is because they know that by running profits through Ireland, which has a low corporate tax compared to other countries in Europe, they can pay less tax. Companies of all sizes can do this and we offer exactly these services for our clients, it is not just for the big boys. Paul Orford | Cost can play a huge part in selecting a service provider. With many low cost providers on the market, how do you differ? Julian Kramer | We thrive by being 7
exactly what our competitors are not. It makes no sense to entrust the future of your business or your assets to low cost cowboys. You can maybe tolerate a budget airline for 90 minutes, with your knees squashed into the seat in front of you. But you would not use that same carrier to fly you on your honeymoon for 14 hours across the globe. And to be honest, if you would, then you are probably a perfect match for one of these low cost providers. A lot of this is about making the right decisions. Many of our competitors started because someone saw an opportunity to make a quick buck but when I started offshorelicense.com it was because I realised I had experience that nearly no-one else has. My starting point is to try and commoditise these unique experiences and skills not just set up a hollow website and make it up as we go along. I never know how much credence to give to corporate slogans but I really believe in ours “Knowledge in Experience.” My experience is clear but that expertise runs through the whole company. Nearly all our staff are qualified to masters level and have worked all over the world. As an example, the head of our legal department gained his legal papers in the Netherlands and previously worked for a large Swiss financial firm. I should also say that I am extremely lucky that Riga is my home city; it is full of intelligent, well qualified and multilingual people and we really benefit from that. The same goes for our offices in Cyprus and Prague, two places ISSUE #4 Vol. 1
where we have found staff who really know how to meet the needs of the clients we serve. Having worked directly with clients before I have instilled a culture where we deal with our customers efficiently and discretely. We get all the information we need upfront and then we get on with it to me that is the definition of a “turnkey” policy . We know that people and companies who use us are busy running their affairs and do not need to be bothered. I think we also standout by the range of services we provide. We can assist with compliance ahead of audits and our accountants can prepare various reports. Gaining residency or trademarks is also vital in this globalised world and we provide those relevant services.
Paul Orford | What should we look out for in 2017? Julian Kramer | I said earlier that I thought the EU is on the brink. That may or may not be true but the reality right now is that stricter regulation is on the march and you need to adapt. Retail FX is especially vulnerable but there are still options and we know exactly how to work within this system. If I had to distill this down into one message, it would be; the more bank accounts and licenses you have, the better.
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The Capital of Technology Ron Finberg, Capitechs' Business Development Manager, takes a moment to guide us through MIFID II
At Cappitech, they believe in using technology to increase efficiency for financial firms For the Forex and CFD industry, they do this through their Capptivate regulatory reporting platform. Supporting EMIR, ASIC, MiFID and shortly MiFID II, Capptivate processes over a million transaction reports for online brokers. | Who uses your services? Cappitech is split between two main business lines; Products and Services. Our main product is Capptivate, a SaaS based Regulatory Reporting solution for EMIR/MiFID/ASIC Transaction Reporting. We made the underlying infrastructure super flexible, to support a wide array of clients. Currently reporting are hedge funds, non-financial firms with derivative exposure, online brokers and liquidity providers. With our Services business, we provide customized technology solutions for the financial industry. Work can be as large as multiyear implementation of trading related projects with ongoing support, one-off development projects and product consulting. Customers include global brokers, hedge funds dark pool providers, post-trade reporting specialists and fintech startups. ISSUE #4 Vol. 1
| How does Cappitech distinguish itself from competitors? Customer flexibility, tech experience and product features. Based in the heart of Israel’s technology sector, Cappitech is a ‘technology first’ company and that is well represented by the percentage of developers composing the overall staff. The emphasis on technology can be seen in our reporting platform. Unlike many of our competitors, Capptivate is file format agnostic. As such, rather than forcing clients to send us data in a specific file format, we can adapt to the data sets our customers already have available. Also, we launched a back-office dashboard for our customers. Most brokers have no idea what their EMIR reporting vendor is submitting on their behalf. Without dashboard, all of that information is easily available to view. 10
| Are financial firms comfortable with using cloud based products for sensitive regulatory reporting needs?
Equity CFDs but CySEC doesn’t require it.
This is an important question for Cappitech as Capptivate is primarily a cloud based SaaS offering even as we support a locally hosted instance of Capptivate. However, our preferences are to provide Capptivate in the cloud due to operational and economic benefits to customers. As we are in 2017, nearly all brokers are operating some form of externally hosted technology. Therefore, firms are comfortable using 3rd party solutions in the cloud and we see similar uptake for our EMIR and MiFID reporting offering.
RON FINBERG Business Development Manager
| Is MiFID II as big of a deal as people say?
MiFID II is going to cause a whole range of CFD products to need to be reported regardless of where your firm is regulated in the EU. Therefore, like EMIR, MiFID II compliance increases the ongoing cost burden brokers will have to manage to comply with the new regulation. If you are already reporting for EMIR, then some of the technical aspects shouldn’t be too hard to comply with, and firms like Cappitech can help with single data connections for submitting multiple regulatory reports.
One of the big changes for MiFID II compared to MiFID I is harmonization of reporting regulation across different EU countries. For example, under MiFID I, the FCA requires brokers to submit Transaction Reports for
So the answer is yes, MiFID II is a big deal since it creates new work for brokers and raises their costs of doing business which can’t always be passed on to clients in the competitive CFD industry.
At the end of the day, with compliance requirements increasing due to new regulation requirements, every broker wants to save money. 3rd party solutions help reduce IT and compliance costs involved with handling reporting.
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A Global Career for a Global Industry Game Changers PROFILE PICK CEO, Jonathan Baumgart
Jonathan Baumgart is the CEO of Atomiq Consulting, a firm that specializes in literally all the services brokers need to be successful in today's competitive industry. Atomiq Consulting's flagship service is IT consultation for MT4 brokers. In addition, his firm can assist brokers with establishing licenses, managing risk, marketing, and introducing new products like social trading and diamond index trading. Jonathan's career has mirrored the global nature of the FX industry. Having initially started at FXCM's office around the corner of Wall Street, Jonathan soon relocated to help launch their burgeoning Dallas office. Having ISSUE #4 Vol. 1
never lived in Dallas before, the changes were noticeable. Used to cramped New York apartments, he signed the lease on his new place in Dallas without even knowing it had an additional bedroom! Being fluent in German, Jonathan was chosen to help launch FXCM's Berlin office in 2010. Acclimating himself to life in Europe after Texas was an adjustment but offered new perspective, especially in terms of making sales to German speaking clients.He also grew an appreciation for the many local beers Germany has to offer, an important aspect of German culture. When Boston Technologies was beginning to gain attention, Jonathan made a strategic decision to relocate to Boston to get in early on a growing company, a wise move as it exposed him to a different side of the business. Confident in his skills and market knowledge, he launched Atomiq Consulting in 2014 and relocated to Poland. Quickly, Jonathan learned the many differences that business in Europe presented, some of which were quite challenging having just left the high growth focused start up world of Boston. The ability to travel, establish connections with people all over the world, and take part in a rapidly growing industry are just a few reasons that every single day is a unique and exciting one for Jonathan and Atomiq Consulting. 13
Super Mario The charismatic CEO of Fullerton Markets, Mario Singh, gives us a few minutes of his time for a one - on - one lowdown on his spectacular rise
Paul Orford | Can you outline to the readers how you got into this industry and how you became not only a hugely popular media figure in Asia but also building your own personal brand world wide. Mario Singh | I got involved in the Forex industry about 12 years ago. At the time, I was with a friend who intrigued me with the sentence "Look at what we can make with just an internet connection and a laptop!" Being the naive person I was, I jumped head first into funding my first LIVE account and proceeded to lose it all in just 6 days. I could have given up and brand the industry "risky" like most others, but I took a different path. I searched for mentors who had a name in the Forex industry and pleaded with them to teach me the ropes of successful trading. Today when people ask me what's the single most important ingredient of my success, I attribute it to my two early mentors, Kathy Lien and Ed Ponsi. I would say three specific milestones helped me to rocket my personal brand in Asia: Appearing on CNBC and Bloomberg. My big break came when I had the opportunity to appear LIVE on CNBC for the very first time in 2009. I was so nervous that my mouth was moving faster than my brain. Although I didn't do well my first time, I think CNBC appreciated my frank and authentic views and called me back. That led to me appearing on all their major segments like "Squawk Box", "Capital Connection" and "Worldwide Exchange." One of the anchors even called me "Super
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Mario" LIVE on TV! I recall how I used to get emails from people all over the world saying that they appreciated my opinions and "no holds barred" trade calls LIVE on CNBC. Publishing my book on Wiley. I wrote my first book "17 Proven Currency Trading Strategies" which was very well received in the trading community. In the book, I shared a segment called "Your Trading Profile" which allowed anyone to find out their dominant characteristic and how to use that to their advantage when trading the markets. The book was also endorsed by billion dollar fund manager, Dr Mark Mobius from Templeton Emerging Markets Group, one of the largest hedge funds in the world. Corporate training for major banks. I did some work with private bankers from Julius Baer (one of the largest Swiss banks in the world), and proprietary traders from ICBC (the largest bank in China). I am in touch with some of them to this day. Looking back, I would say that these three specific milestones helped to launch my brand all over Asia. Today, I have launched my second book entitled "Unlocking the World's Largest Financial Secret" and I'm currently writing my third. Both books are available in 4 languages. I am grateful that my personal brand has also benefited from the explosion of social media which I use to keep in touch with my community. Today, people can follow me on my Facebook page at: https://www.facebook.com/MarioSinghPage.
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A quick word to share on personal or corporate brand-building: always focus on what you can give, not what you can get. Focus on where problems and challenges arise and add value by solving them. You would slowly gain a reputation of being the "go-to" person or the "go-to" company. That would almost certainly launch your personal or corporate brand in the marketplace. Paul Orford | How was it when you were first interviewed on TV? Any tips to give the readers to enhance their public speaking skills? Mario Singh | My first major TV didn't go too well. I made the fatal mistake of thinking CNBC would provide me the questions the night before! I can laugh at myself now, but I certainly learnt a big lesson back then - when you appear on the world's largest financial media of CNBC and Bloomberg, you are expected to know your stuff! Here's two quick tips which can help anyone do well on LIVE TV interviews: 1. Look directly at the "black box." In most cases, you would be talking to a black box because the TV station needs to edit the screen, add more people in etc. Keeping your eyes fixed on the black box without looking around instills a sense of confidence in your audience. 2. Learn the art of diversion. If you don't know the answer, the subtle art of "That's a great question, but have you considered this area...... xxx...... xxx....." (divert to
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something you know). I should charge for this underground advice! Paul Orford | You began FX1 Academy way back in 2006, which in this industry is an age ago. What do you feel contributed to your success in an incredibly crowded market? Mario Singh | The single biggest factor would be differentiation. Here's an example: You can find Intel products in all Samsung, Apple and Dell computers but each of these companies represent different ideologies and have different revenue models. Similarly, while FX1 may be seen to compete in the "overcrowded" education space, we differentiated ourselves very early on by focusing on 2 things: teaching simple fundamental and economic analysis (as opposed to focusing on technical strategies) and having personal coaches attached to the students. Our company exploded - in a good way. Paul Orford | In September of 2015 you went live with your own brokerage Fullerton Markets. What were your motives for this? Mario Singh | I had a vision for the brokerage industry - to add massive value to clients on the upside while protecting their downside. Let me explain via our "3S model." Safety of Funds All clients enjoy unparalleled fund safety with 3 levels:
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1) Segregated Accounts (via ANZ Bank) 2) Independent Trustee Administration (via Kiwi Global Trust) 3) Trustee Liability Insurance (via AIG) We are the one of the first brokers in the world to strike a deal with billion dollar insurance company AIG to provide insurance coverage as an added layer of safety. Speed of Execution In the brokerage world, an acceptable speed of execution is between 350 milliseconds (m/s) to 500 m/s. However, with our Straight-Through-Processing (STP) model, we have spared no expense to ensure low latency connectivity to our dedicated servers in London. This setup has brought down trade execution to 200 m/s, one of the highest in the retail trading world. System of Wealth Creation We truly believe that anyone can create wealth in the markets; either by trading or by business-building. Here's how we support traders and IBs: Traders • Weekly Research • Weekly Webinars • Over 100 Trading Videos IBs • Fullerton Suite (a powerful back-office to help lBs manage their business) • Attractive Rebate Payouts (paid instantly) • PipBox (A complete toolbox of
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internet marketing and social media marketing tools to build their business) Paul Orford | How are you the challenge of the day to day cut and thrust of owning a brokerage? I love everything about our industry - the pulse of the markets, meeting traders and IBs, speaking at conferences and connecting with industry thought leaders to learn and share ideas. My passion gives me a high to "go forth and conquer" everyday. Our industry is experiencing tremendous growth, which is testament to the fact that people see our industry as a genuine platform to create wealth. This is the impetus that drives my organisation to disrupt certain segments within the brokerage world, push boundaries and create innovative solutions to meet client demand. Paul Orford | What are the future plans for both yourself and Fullerton Markets? Mario Singh | I set a big goal for Fullerton Markets to become a top 10 player in the brokerage world in 5 years. I have a great team, and I'm incredibly proud of each and every one of them. They know the goal and they hustle everyday to attend to clients, think up fresh ideas and push us forward. I'm a big believer that when a group of people come together and work towards a common goal, magic almost always happens.
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If Bots Ruled the World Head of Institutional Sales, Paul Orford from AMB Prime, talks bots and argues the case for the industry to go further in driving AI development. First featured on Finance Feeds JANUARY 23, 2017
Further to FinanceFeeds’ reports about financial services companies increasingly adopting artificial intelligence (AI) solutions, whereas human employees are losing their jobs, we continue to explore the key question: Is the FX industry going to join this trend? To help us in the search for an answer, Paul Orford, Head of Institutional Sales at AMB Prime, has kindly agreed to share his view on the matter. During this very exciting conversation, Mr Orford sheds light on the readiness of the FX industry to embrace new technology and reminds us of the revolution that the destruction of the Spinning Jenny created in the labour market. Does this sound interesting? Read on. | What is AI anyway? First, we asked Mr Orford on how the use of artificial intelligence solutions fits within the concept of a Prime brokerage and how this type of technology could be useful for AMB Prime. "First I think it is important to classify what is meant by AI (artificial intelligence.) I would use the definition of a branch of computer science with the simulation of intelligent behavior in computers, or the capability of a machine to imitate intelligent human behavior”, said Mr Orford. "If we look at it from its most basic tenets, then there already is the ability to do this with such fields as compliance. Where we face the challenge is the legal structures that we
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have in place”, he added. "If the right technology came along then it would definitely reduce bureaucracy and increase efficiency as it would be the same movement forward as using a paper based filing system and then moving to an IT based solution”, Paul Orford, Head of Institutional Sales, AMB Prime. | Is the FX industry ready for the big change? FinanceFeeds then asked whether Mr. Orford believes that the FX industry is ready to adopt the AI solutions, given that thus far, the main adopters in the finance sector seem to be banks and insurance companies. " I believe that our sphere from a technology front is ready for it as we are so used to innovation and we are traditionally an open minded industry”, Paul Orford, Head of Institutional Sales, AMB Prime. He noted: “However, we do need to develop the structure from a legal point of view and the rules of engagement of the end users.” Humans vs Bots Asked to decide whether a robot is better than a human being in terms of marketing or other back-office functions at an FX firm, Mr Orford called for a more precise definition of “better”. "It depends on how you classify ‘better.’ If you are using the definition as a streamlining of the institution then perhaps, yes. If you are talking about the cohesion of the actual work place, then you cannot replace that.” Mr. Orford forecast that, for retail FX, bots will take jobs first in compliance. Conversely, for my own employment self-preservation, AI 21
would find it hard in building a relationship with clients and service providers so humans would always have an advantage in this respect”, he argued. When the Spinning Jenny was destroyed… We asked Mr. Orford whether he would employ an AI solution at AMB Prime and whether this would lead to employees being let go. " I can remember a long long time ago when I was studying A level sociology. We covered the politics of technology in that the increase of technology would make us free to pursue our free time and give us untold liberty. However, anyone can see that this will always result in the loss of jobs in any sector”, he said. "The evidence would suggest this from when the Spinning Jenny was destroyed as it damaged the employment prospects of workers within their industry”, Paul Orford, Head of Institutional Sales, AMB Prime. FX trading by its very nature is always going to evolve as it is always about trying to stay ahead of the competitor/market participant. Whether we can step away and never have a kill switch on it and let it make its own choice is a different debate”, he elaborated further. Bot regulations The European Parliament is now discussing rules for the use of robots and robotics-related technology. FinanceFeeds asked Mr. Orford whether he thinks these laws are necessary and whether they will be effective. "Of course. Much like when you audit a brokerage, you would require an audit of the AI for the external parties ISSUE #4 Vol. 1
to know that you are in good health. To assess whether it will be effective we would have to reflect upon the proposed legislation and to see how it is applied. It is such a wide subject that I would imagine that it would be a piecemeal process”, he said.
PAUL ORFORD Head of Institutional Sales
| Will Paul Orford be replaced by a Bot? To conclude the talk, FinanceFeeds decided to provoke Mr Orford. We asked him whether he would “outsource” some of his day-to-day responsibilities or work obligations to an AI solution. “I think it would be quite a challenge to do this as my role is a very dependent on developing and maintaining relationships which means human contact and building rapport with someone. That’s not to say it is impossible to do, however I think it would be the last bastion of our industry to fall under the servitude of AI”, he said.
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Interview with Takeshi Saito, Japan's go-to tech man outlines his new venture and how he sees the market evolving.
Japan's New Rising Son
Paul Orford | Can you give us a brief outline of your experience? I started my career at Barclay Bank Tokyo Forex Option Desk and then moved after some years to Bloomberg Trade Book Securities as an eCommerce Sales Executive. I then worked for 2 Japanese local Forex brokers as a dealer and then established my own business company TS Consulting Japan Co., Ltd. Paul Orford | What motivated you to begin Aurora? Takeshi Saito | As a business consultant, I was helping some HFT Hedge Fund clients before starting the AURORA project. With its knowledge and my past experience as a trader and dealer at financial institution, we built up a proto-type system for our own trading purpose. However, the more we upgraded it deeply, the more I began to feel I wanted to provide this great system to other Forex Players as I strongly believed it had lots of solutions for trading and dealing that no one had ever provided before, and finally, the AURORA was born. |Paul Orford | Are you looking to just focus on the Japanese market? Takeshi Saito | No, I am targeting global markets including Japanese brokers. I hope to meet as many brokers as possible, present the beauty of AURORA to them, and start talking for the future. Paul Orford | In a crowded technology market, how do you differentiate with your competitors? Takeshi Saito | Our biggest advantage is our Team Member, Managing Director; Takeshi Saito and five other talented IT
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Engineers in each specialist field. We all have a sophisticated IT Technology and long-term Experience in the Financial Industry. All of our team members understand well what they develop and even create further and better. Never lost where they stand as patch-work, then we can always listen to our clients’ voice and reflect something into our product with amazing speed much more than they expected. Not only sincere Customer Support, but also such Speed or Flexibility bring our clients great benefit we considers most important as; Easier Operation, Cost Reduction, and Revenue Increase. And we could have got a great confidence from our clients. We are here for clients, and the AURORA will never sleep… Paul Orford | When I saw the demo, you are embracing Crypto Currencies. Is this part of your plan for the future? Takeshi Saito | At this moment, the AURORA is compatible with multi asset classes perfectly; Forex, CFD, Commodity, and Crypto Currency like Bitcoin. And one of the biggest Japanese Bitcoin Exchange Company has provided unique margin trading service by “MT4 + AURORA” set with many BTCXXX pairs since Aug. 2016 and expanding its business in HK / China through the subsidiary now. Paul Orford | Plans for the future? Takeshi Saito | The AURORA will grow-up with our clients, we might keep on hearing our clients’ voice and try our best to provide a better service. With the foundation of AURORA technology and experience, now we are preparing for a new service for all brokers. Unfortunately, we cannot disclose its details at this moment, but hope we would present it in near future.
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The King of Diamonds CEO Ludovic Vuillier outlines how we can embrace this new and exciting product line, which is incredibly easy to implement.
Ever since we’ve launched the IDXUSD price feed, we have seen an uptick in the online presence of “diamond software”. Personally, I take this as a great compliment. It means we have a great product and people are now looking to capitalize on that. I wish them all a lot of success. I’ve put together a number of questions and answers based on what I’m asked most often. What is the IDXUSD? Ludovic Vuillier | The IDXUSD is a tradable diamond index – the first of its kind. What is a tradable diamond index? Simple. Let’s take gold for example. Gold is a commodity which you can physically buy and sell. So far, it’s just like diamonds as you know them. However, gold is also a commodity whose price you can speculate on via a brokerage firm. In fact, go into a brokerage account (or Google) and you’ll see that the symbol for gold is XAUUSD. Now back to diamonds. We all know that you can buy and sell physical diamonds. In recent years there’s also been a change from the world of trading diamonds only in face to face meetings, to online ISSUE #4 Vol. 1
platforms that let you trade diamonds via their platform. But then you are still limited to trading actual physical diamonds. And assuming you have the funds for it, you need to know about the intricacies of each type of diamond, the different cuts, colors, etc. In collaboration with IDEX Online S.A. we have taken a diamond index they have (more about that below) added an element of price variability based on supply and demand from the trading community and added a system that includes a matching mechanism. This means that from now on, trades worldwide can trade on the diamond index, the IDXUSD, without the limitation of having to buy actual diamonds. What is the price based on? Ludovic Vuillier | Our tradable index was created in collaboration with IDEX Online S.A., one of the leading diamond industry players with an inventory of approximately 700,000 diamonds worth about 6 Billion USD. This inventory has been tracked for 5 years (which is important since analysts need price history to analyse) and has been used to create the IDEX Composite Index with the help of a Mathematics Professor from the Tel Aviv University in Israel. What our team did was to take that Index and add to it an element of price mini-variability based on the supply and demand of the traders trading the IDXUSD. 27
Do I want to offer only diamonds on my platform or do I want the ability to offer a number of products? Ludovic Vuillier | Specializing is good. There’s no doubt about it. But if you offer your clients only one product and your neighbor offers 10 products including the one you are offering, who do you think most clients will go to? With our diamond feed, you can offer them as many products as you want on any platform you want. This is important as if you just buy a diamond trading software, it is just that – a diamond trading software. And that’s without mentioning the lack of additional perks which you get from integrating our feed into your system. Am I offering my clients something they can easily trade? Ludovic Vuillier | One of the hardest things about the Diamond Market in general is that there are so many variables, knowing what price a diamond should be and where the price is headed is an entire subject which takes years to truly understand. By creating an index in collaboration with IDEX Online S.A. we boiled it down to one price which looks at the entire market as a whole, including the current trading's supply and demand. The IDXUSD lets traders easily analyze the current price, trend and the future of the index. This is much easier than learning the intricacies of the different types of diamonds, their values and each one’s price trends. How easy is this to integrate into the ISSUE #4 Vol. 1
platform that I want? Ludovic Vuillier | So so so easy. When we first put together our development team and brainstormed on how to build this we were guided by a few guidelines. The first two guidelines which were always at the top were: (i) needs to be able to integrate into any financial trading platform (ii) needs to be easily integrated into platforms. Of course, you as our client, get our full support. We will do this with you step by step (or for you if possible and if need be) to make sure that the integration goes as smoothly as possible. How volatile is the price? Ludovic Vuillier | Since the IDXUSD is based on the IDEX Composite Index with an added element of supply and demand variability, it is liquid enough and easy enough to enter and exit trades as needed. But you will rarely find big spikes like you do with some other currencies Can I integrate intelligent risk management based on the circumstances? Ludovic Vuillier | Intelligent risk management can be very profitable yet very risky. There is a time and place for it. Most softwares, if they do give you an index to trade means you will be only a market maker with no ability to hedge nor any ability to put the trades through to the market. This is why we built our system to let you choose how you want to deal with trades. This 28
intelligent risk management lets you maximize your profits while minimizing risk. Can I hedge? Ludovic Vuillier | As can happen, at times your risk management will decide that putting in a hedge is a good idea. With our system, there is a way to hedge your trades as long as the process follows certain parameters.
around the IDXUSD exclusively. This will give your clients the confidence needed to trade the Index and it will give your team the knowledge needed to discuss the IDXUSD with the clients (ii) we offer analysis services to brokers who want a regular analysis of the IDXUSD for themselves or their clients (iii) plenty of traders contact us requesting information on where they can trade the IDXUSD – when you integrate the IDXUSD feed, we put you on our list of approved brokers which is an additional marketing tool for you. How do you earn money? Ludovic Vuillier | We charge a fee based on volume traded. For more details on the pricing, get in touch with us directly.
LUDOVIC VUILLIER CEO
Are additional services offered that will help me as a broker? Each service separately is important. But we believe that giving you one service without a full solution isn’t being the best we can be. Which is why we have built the following services around the IDXUSD: (i) with our partnership with Afxants (the only European accredited trading academy) we created The Diamond Academy built ISSUE #4 Vol. 1
Are you the type of company “that must not be named”? Ludovic Vuillier | We are not a market maker. Our matching mechanism either matches your trades to opposing trades and we earn a fee based on the volume traded. If there is no opposing trade then there is no match for your trade, meaning your trade will not be fulfilled and we won’t earn a commission. We are completely transparent about our matching mechanism. Our interests are not opposed to yours ever.
I look forward to hearing from you with any other questions you may have.
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The Journal for Industry Leaders
APRIL 2017