Last month, Invast Global announced its decision to expand in the UK with plans of acquiring GMO Financial Holdings-owned GMO-Z.com Trade UK Limited. It came after the Sydney-headquartered company had strengthened its base in Cyprus for European operations.
Finance Magnates recently sat down with Invast Global’s Chief Executive Officer, Gavin White, to know more about the significance and details of the potential GMO-Z.com Trade UK acquisition deal. He also touched on other important topics like the future of cryptocurrencies and the implications of Apple's ban on MetaTrader apps.
White has been a part of Invast since June 2013 and became the CEO in November 2015. In addition, he sits on the Board of Invast’s holding company, INV Inc.
The Q&As with White are the following:
FM: Was the acquisition more a result of a strategic global growth plan (after CY), or an opportunity that presented itself? It will be interesting to walk our readers through the process.
Gavin White (GW): It was both, to be honest. We had been researching the acquisition for many years, waiting for the right opportunity. We knew that we wanted a full global footprint of physical offices to allow us to maintain the high levels of service that we expect of ourselves, as our diverse global client base continues to grow strongly. It is actually a great example of the industry ecosystem working perfectly. When we identified GMO UK as an excellent acquisition prospect, I called Ramy Soliman at GMO to discuss the proposal. Ramy and I have formed a close friendship after attending many Finance Magnates events over the past decade. Our relationship allowed the acquisition to proceed quickly and smoothly. So, apart from Ramy, GMO UK CEO Funada-sama and their professional team, I also need to thank Finance Magnates!
FM: What sort of due diligence or examination do you perform before entering such a deal?
GW: The deal was negotiated and discussed at length over the course of the year. The agreement was the culmination of many months of work and research across the market, the team, the business opportunity and the brand. We have wanted to be in London for some time, and we are pleased to have finalised our negotiations. We look forward to being in London next week for the Finance Magnates London Summit.
FM: Both firms have strong backing and roots in the Japanese market – has this affected the acquisition process, culturally or otherwise?
GW: Invast Global is well known in Japan and not just because our parent company is a publicly listed Japanese company. Independently, Invast Global has built a big presence in the Japanese market as a top-tier provider of OTC liquidity and Prime Services. We understand that market well and know the corporate strength and high standing of GMO in Japan. The negotiations were completed with due respect given to the cultural etiquette of all stakeholders.
FM: What does the acquisition mean to clients of yours and GMO? Will they feel any immediate change once it goes through?
GW: We are planning for this to be a seamless transition to embed the GMO UK team into the Invast Global business. Having a London office will give us access to great talent that will further benefit clients that will be on board in their time zone. With our recent transition to oneZero, our clients will also experience faster pricing and greater infrastructure resiliency and redundancy.
FM: How do global brokers work with global liquidity providers? Do regional offices of international brokerages use local networks and relationships?
GW: Brokers will usually have a relationship with a key individual that serves as their relationship manager within a global liquidity provider. At Invast Global, we pride ourselves on our high touch relationship management. We tailor our offering and pricing to our clients’ businesses, so we know well in advance what their business needs are and what is important to them.
Regional offices are valuable as they allow our team to have a direct face-to-face relationship with clients in their language and time zone. We have strong local networks and relationships. Riana Chaili, our CEO of EMEA is a highly respected specialist in this industry and brings to Invast Global an especially deep connection to the Cypriot brokerage industry.
FM: Having an increasingly global view of the industry, which different trends or differentiators do you identify between regions: do Aussie, SE Asia, EU or UK brokers have distinctly different needs?
GW: Over the past 12-18 months, we have observed an accelerated shift to multi-asset trading in the Asia-Pacific region. While this trend has been developing for many years across Europe, interest there has accelerated significantly recently too. So multi-asset trading, particularly being able to access equities in foreign jurisdictions, is a trend that is common across all brokers, regardless of their location.
The most interesting trend we are seeing is in Japan. Japanese brokers are becoming more focused on supplementing their ‘vanilla’ offerings with more complex structured products to allow them to earn revenue in ways other than commission. The instruments we intend to provide in response are not anything too complicated, but they are unique. Products like ‘Pairs’ instruments, where clients can trade one stock against another, or a stock against an index, oil or gold is just one example. Japan has a reputation in the industry for early acceptance of innovation, so this trend might signify an important emerging opportunity in other markets.
FM: What are your views on Cryptocurrency, both as a traded asset and means of capital for firms (collateral, exposure of “unbanked” brokers)? Do bitcoin and Ethereum have room in the mainstream financial system?
GW: We believe that most crypto instruments are unregistered securities, and, hence, we will not be involved in those markets. Bitcoin and Ethereum have reasonably valid arguments (Bitcoin more so than Ethereum) for not being securities, but then these instruments create serious KYC/AML challenges for exchanges. We need to wait for the legal/regulatory system to catch up to the innovation and to make rulings on products. The recent win by the SEC over LBRY was a very important signpost. The US Court ruled LBRY is a security. Ripple vs SEC is the main event though. We only have to wait a few more months to hear the US Court’s verdict in that case. I believe XRP is a security, and the SEC will win the case. This will have a significant impact on the market.
FM: The MetaQuotes app ban has brought up the topic of the providers' role and responsibilities for broker clients’ conduct. How do you see Invast Global in this regard? Can you detail your requirements from prospects in terms of regulation or due diligence? Is there an industry standard you would recommend?
GW: Invast Global undertakes extensive due diligence on all of our institutional clients, both at the onboarding stage and on an ongoing basis. This encompasses financial and regulatory due diligence. We don’t shy away from the fact that we have probably the most stringent requirements in the industry for onboarding clients. We have a very experienced team, and we are very cognizant of counterparty risk and how a complacent attitude to due diligence and counterparty risk places all of our clients at risk. We ensure we are thorough, and we play it conservatively.
FM: As an ACI member, Invast Global adheres to the FX Global Code of Conduct. How does that affect your clients in the retail trading space?
GW: As a signatory to the FXGCC, which is rare amongst our peers, our clients can review the code and understand the obligations that are placed on us. It is not easy to ensure compliance, but we believe the transparency and reassurance the code gives our clients is well worth the effort.
FM: How is the Sevens team sponsorship going? Is it mainly an outreach initiative, or do you see genuine value for the business in it? Is it true that you decided on it exclusively to be able to shoot this glorious tackle?
GW: While the Sevens sponsorship is not ongoing, the tackle video is one of many fond memories from that partnership. It was generous of the players to partake in the video. They enjoyed setting me up. I would like it on record that our marketing team edited in the little squeal sound I appear to make. I did not make that sound!
FM: Are new sponsorships in Europe on the cards?
GW: We’ve sponsored the Limassol Crusaders Rugby Union team for the 2022/2023 season! Whilst Cyprus Rugby is still in its infancy, the addition of Rugby Sevens into the Olympics has drawn greater interest and funding than ever before. Many of the Cypriot rugby players are heavily involved in the FX and CFD industry.
FM: After the European and UK expansion, what’s next for Invast Global?
GW: We are exploring opportunities for expansion globally into regions that make sense for our business and what we offer to the local market. As we continue to evolve our business and offering, further expansion will become necessary. Australia has a highly regulated and globally respected financial system, so we can leverage our robust and secure business model into other well-regarded financial systems easily to grow quickly and scale.
