Alpari's CMS Forex Japan acquisition, interview with Daniel Skowronski

Following Alpari's acquisition of CMS Japan I had a chance to interview Daniel Skowronski, Alpari USA CEO who is also responsible for Alpari's global expansion efforts. As I already mentioned in my commentary about the acquisition, I think it's an audacious move as Alpari is a predominantly MT4 broker and Japan is a notoriously undeserved market in terms of MT4. Alpari may gain lots of market share if Japanese clients will indeed shift to MT4, like they are starting to recently do, or may struggle if the traction is slow. An expected reduction in Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term is also going to affect Alpari's operations in Japan.

Why do this deal if you said you are exiting Japan two months ago?

We never said we are exiting from Japan what we said was that we would no longer offer service to Japanese clients to our UK office. We had a large Japanese client base that had come to us directly from Japan. In part so they could get better leverage but more importantly we found out they wanted to trade with us because of our expertise in helping clients set up MT4 expert advisers as well as our execution on the platform. So it wasn't necessarily due to leverage restrictions rather for Alpari being the best and number one MT4 broker in the world.

We made the move to stop servicing Japanese clients because of regulatory reasons and we wanted to be compliant with Japan authorities. However, we also knew we wanted to be in Japan. About 3 weeks after the announcement I was approached by CMS to see if we would be interested in purchasing the assets, license, and acquiring the existing staff (no client data base as this had already been sold off to Gain Capital). We did not need the client list as we already had an existing client base we were winding down as well as our own client leads. We will reach out to all of our past Japanese clients to re-on board them to Alpari Japan.

Alpari is the number one MT4 broker in the world. Now we are in Japan. We have no illusions that we will be the largest broker in Japan but I can assure you we will be the number one MT4 broker in Japan very soon.

What do you think of the Japanese leverage restriction coming this August forcing max leverage at 1:25 and how will this affect your business?

We already expect to have a decent client base built up when the new leverage restrictions begin in August. Of course we expect turnover to be lower but we hope that will be offset by Alparis growing reputation as we continue signing up new clients. We already saw firsthand that there is strong demand for MT4 and EA education in Japan. Sure there are a few players with MT4 but their model and service doesn't come close to ours nor do they have the technology or as much experience as we do with MT4 (and soon MT5). We plan to fill that gap in Japan, it's what the clients in Japan are demanding.

Can you tell a bit about the deal structure - cost, volumes, number of clients, etc?

Its a simple deal we bought the assets, license and assumed control over the staff. (Very little turnover but we are looking to fill some key positions). Again no client list as this was already sold off to Gain Capital and we are respectful of that deal.

CMS Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Japan is related to the American CMS Forex or is it just a local unrelated franchise?

As far as my understanding it was related to the US branch of CMS, it was not a franchise like FXCM Japan was.

What platform does CMS Japan offer now and will it be offering your MT4?

CMSJ offered their proprietary platform VT Trader, we will not be offering this. We will offer MT4 and MT5 and in about 6 months we will launch our Currenex Pro platform.

What do you think about the notably underdeveloped MT4 market in Japan in general?

The Japanese market is undeveloped when it comes to MT4. But we know there is this movement that more and more clients are starting to demand it. We have a strong strategy in place that we are launching very soon.