Start your prop firm with cTrader
If you work in OTC derivatives in the UK, EU, or Australia, something you may have noticed lately is the regulator pretty much hates you and wants to destroy your business.
This is usually done implicitly rather than explicitly, and so there is a Nurse Ratched vibe that slowly drives you crazy, until you either give up to prevent genuine insanity or you decide to smash through the wall and venture to freedom in places like Mauritius and Vanuatu.
A facet of the Ratched world we live in is that the regulators have their eyes fixed like Sauron on anything a broker might do wrong. This may explain why you have seen some ‘odd’ stuff with prop trading companies that are backed by brokers over the last 12 months.
Lots of brokers that launched the product have attempted to separate it from their main brand. For example, IC Funded is on a totally separate URL to its main site and, although the branding is similar, there is not much to suggest the firms are connected.
Similarly, companies like Fintokei, Profitex, and FXIFY all had or have branding and entities distinct from their partner brokers.
There are potentially just product-based reasons for doing this. You could argue that prop is its own ‘thing’ and consequently it deserves its own website.
On the other hand, the general logic of most trading and investment apps today is to have everything in one place, both to satisfy client demand and improve your ability to cross sell. Being real for a second, if someone like Trading 212 added this product to their app, they would probably be coining it very quickly.
So this seems more deliberate than just wanting to separate two different products. Plus, when you look at how some props are structured, it does seem like they are playing it very safe.
For example, OANDA’s prop trading firm does not take any clients from the UK, Australia, the US, Singapore, European Union, or Australia. Anywhere the company is licensed basically.
This suggests the reason is more about not having to deal with the inevitable agro that the regulator will bring. But then there is no regulation covering this industry, so in theory there should be no problem.
That being the case, there is something to be said for the argument that there is a benefit to having no license if you are operating one of these firms.
On the other hand, what is kind of funny (at least to me as an outside observer) is that MetaQuotes keeps pushing firms back in the opposite direction to the regulator.
Firstly, pure play props are having to get regulated to access MetaQuotes products. At the same time, brokers with prop arms are having to link their brokerage arm and prop product.
For example, Hantec Markets recently rebranded its prop offering. The bulk of that was about improving the colour scheme, website design, and overall user experience.
However, the company also changed the URL so that it was clearly linked to Hantec Markets, whereas before the prop offering had its own website.
That may have been deliberate on the part of the firm. However, and as reported on TradeInformer towards the end of last year, MetaQuotes has definitely asked brokers adding prop products to link their broker URL to the prop. You can see this with OANDA and Taurex, for example. FXIFY also had to make the change.
So it was interesting to see Blueberry’s prop arm partner with Devexperts earlier this week. The company said this was for its brokerage business, which it is in part.
But now Blueberry’s prop arm, which was previously linked via its URL to the broker site, has switched back to its own URL. In the announcement about that partnership, the two companies also noted that Blueberry will be able to license out the Devexperts platform to its B2B partners as well. Presumably this includes other prop firms.
Something else worth noting about the joint URLs is this. If your prop is on the same URL as your broker business, it could end up looking like…
- You are marketing your broker where you shouldn’t be
- You are marketing a prop offering with things (like incentives to trade or bonuses) that regulators have restricted
Many regulators don’t get what this product is and so if they just see this stuff on your website, they’ll probably just assume it’s a ‘genuine’ financial product. As an example of this, Turkey blocked access to several prop websites recently because they said they were marketing crypto products.
This is obviously bad. No one wants to feel that kind of heat or deal with the problems it could create.
And so the end result is you could be in a position where you keep MetaTrader but cannot market your prop offering in the way you want. Or you ditch MetaTrader and you can. A tough decision.
