Finance Magnates recently spoke to FXPRIMUS about the changes to the company and the industry, including CEO Terry Thompson and recently hired COO Stephen Leahy about what is next for the company and the industry. Their full length interview can be read below.
1. FXPRIMUS has been around for a number of years with a fairly low profile in the industry. Can you tell us a bit about what you have achieved since founding the company in 2009?
(Terry Thompson, CEO): My founding partners and I built the company from scratch starting in 2009 as you mentioned. FXPRIMUS has had a focus on the South East Asian client base since inception and we have done quite well for ourselves. Much of the industry was focused on other geographical regions during this time so we were able to build a very strong brand, staff, and network of partner firms in the region.
We operate a fairly lean business model with centralized operations and local sales and support. We do not often release volume figures, but FXPRIMUS does more volume than many of the better-known names that do publically release volume figures.
As you are aware, our parent company Prime Mantle Corporation in November of 2014, to expand our place in the value chain acquired Capital Markets Services (“CMS”), an FCA-regulated brokerage firm that had once been a strong name in the US and European retail space, but has focused on the Tier 2 Prime Brokerage market since 2010.
2. Can you describe any potential plans or ambitions for the company in 2015?
(Terry Thompson, CEO): We had expected there to be consolidation in the Tier 2 Prime Brokerage space in 2015, which is why we acquired CMS; we believe there is significant upside to a well-run Tier 2 PB. Now in the wake of January’s SNB event the possibilities to consolidate companies or grab market share are wide open.
There is still a bit of media coverage related to SNB’s negative effects on the companies in this industry, but behind the scenes and out of the spotlight the ripple effects and the opportunities are massive. Additionally, we feel that it is time to export the strong brand we have built for ourselves with FXPRIMUS in S.E. Asia to other geographical regions.
As we have done in the past, we do not expect to go head-to-head with the largest of marketing organizations in areas where they choose to increase their average acquisition costs massively to gain market share. We will use our unique processes to build some long-term, local relationships in areas of the world where we see the good demographic improvements such as Latin America, the Middle East, and even select regions of Africa.
As for CMS, our increased balance sheet gives an advantage over less capitalized Tier 2 Prime Brokers. We’ve already used our companies combined volumes to improve pricing from our Liquidity providers, and we’ll be adding some industry veterans to the team.
(Terry Thompson, CEO): We will certainly be a more visible company, both to retail traders and to the industry. We have worked hard to improve our LP relationships and improve our customer experience on the trading platforms. We have a marketing plan in place to ensure our clients and prospects know this.
(Stephen Leahy, COO): Internally, we’re working on further developments to our own intellectual property, which is at the core of our operations. It's a layer in the software stack that many FX firms need both large and small. We will continue to expand it, test it, use it internally, and in the future it may end up a stand-alone product.
3. How do you plan to differentiate FXPRIMUS from the rest of the industry?
(Terry Thompson, CEO): As mentioned, we have been successful in the past 6 years but that does not mean we expect what worked yesterday to work tomorrow. Our principles are the same, but we have embarked on a mission to change much of the way the company operates. We’ve improved our capital structure and have brought in new talent.
We recently sat down with all of our liquidity partners and began to leverage the volumes that we do as a combined entity, and the changes in the industry to extract better liquidity from our LP’s. The first place our clients will see the changes is in our pricing and trade execution. We are rolling out new spreads and execution protocol by end of March.
Finally we are adding some proven industry veterans to our team to help us grab the opportunities that we see available. As was seen on ForexMagnates.com recently, we have brought on Stephen Leahy as our Chief Operating Officer.
Stephen has been around the industry for quite some time with a strong reputation as a strategic thinker, and the ability to solve problems. And we have a few hires in the pipeline that will help us with regulatory affairs, sales and relationship management, and technology as well.
4. Stephen, can you explain the rational and impetus behind your move to FXPRIMUS?
(Stephen Leahy, COO): I happened to be seated next to Terry at an event last summer. Terry and I have known each other for a while, but we had not been communicating regularly for a long time. As a general discussion, a lot of the ideas that Terry had about the industry lined up well with what I was thinking about; Tier 2 PB consolidation, technology differentiation, and getting back to the basic premise that a broker is a credit intermediary. So we started communicating more often.
My time at oneZero was a great learning experience for me. I have been in a position of user of financial services software for a number of years, but working with an elite software development team was eye opening for me. The product design and build cycle, the way they think about Black Swan events and possibilities, and learning about agile build processes; it is all very different than a user suggesting a change to the software via “a few more lines of code”.
When the opportunity to join the FXPRIMUS team came about, I realized that it was a chance to implement some of the ideas and strategies that I have, and use the knowledge I have gained in project management, for a large but quiet brokerage that has leadership prepared to do what it takes to become a globally-recognized name in the industry.
5. What is your geographical distribution and where do you see the majority of client traders coming from?
(Terry Thompson, CEO): FXPRIMUS historically has been strong predominately in South Eastern Asia, but through the recent Manchester City sponsorship and additional marketing activities, is starting to gain traction in the Middle East & Europe, which is nice to see. From a CMS perspective, we’ve always been strong in Europe & Asia, and similar to FXPRIMUS, are starting to make significant inroads into the Middle East specifically with the mid-tier brokerage space.
Even with the price of oil in the $40's, there remains demand for margin trading accounts in the Middle East; our FCA-license and the ability to offer non-USD-denominated accounts has strong appeal.
6. Can you elaborate on Mauritius’ regulation - is it strict, or how many companies are regulated there, how is the process of getting licensed?
(Terry Thompson, CEO): Mauritius regulation is indeed strict with only a handful of companies being regulated there, and it’s been a pleasure to be regulated there the past 5+ years since our inception. With that said, FXPRIMUS has made it a corporate initiative to start moving business gradually over to our newly activated CySEC regulated entity in the upcoming month. We feel this is a natural progression for the company and affords us with a greater visibility in parts of the globe we haven’t quite managed to gain market share in yet.
7. How is FXPRIMUS’ prime offering doing, and how are you reassuring clients that despite being regulated offshore it’s worth trading with them?
(Terry Thompson, CEO): FXPRIMUS completed our acquisition of Capital Markets Services ("CMS") in November of 2014. CMS is our FCA-licensed entity that focuses on the Tier 2 Prime Brokerage space, which leaves FXPRIMUS to focus on our growing retail presence. FXPRIMUS maintains a few clients for, which we are a LP, but FXPRIMUS is primarily our retail-facing brand.
CMS has a great history and a knowledgeable staff to go along with our FCA regulation. So CMS is now our Tier 2 Liquidity offering to smaller brokers. We operate the two companies separately; even as far as having separate offices for the sales and operations teams. Where we differentiate ourselves in this increasingly competitive field is our focus on scalable technology and slim margins.
Tier 2 Liquidity providers are really just credit intermediaries. And the way to compete in a commoditized market such as credit is to build scalable technology so as to be able to efficiently add clients. And that is just what we are doing.
