Exclusive: IS Prime’s Raj Sitlani on MT5 white labels, managing COVID, and more

FNG Exclusive Interview… As the trading volumes (and number of new clients, products being offered…) at Retail FX and CFD brokers has grown by leaps and bounds during the COVID era, so too has the business activity of many of the leading service and product providers to the brokers.

So we thought that it would be a good time to catch up with one of those firms, and have a conversation with IS Prime Managing Partner Raj Sitlani. We asked him about managing all that growth and traffic through COVID, what it is like today to start a new FX brokerage and the challenges involved, social trading, crypto trading, and what lies ahead for the sector. Here is what he had to say…

FNG: Hi Raj, and thanks for joining us today. First of all, how are things going at IS Prime lately – are you guys back in the office, or still working remotely?

Raj: We have recently moved to a new office in Bishopsgate in the City, London, doubling our square footage to accommodate the growth we foresee across the ISAM Capital Markets Group.

We are now starting to get the team back into the office and are currently operating at around 50% capacity. We expect this to scale up in the coming weeks and months but, like everyone else, we are just following government guidelines.

It is testament to the quality of our team that, despite the challenges faced during the pandemic and at times, having to fully work from home, our client service has not suffered and our volumes have grown significantly.

Our technology has enabled us to keep working together collaboratively whilst operating remotely but it is great to have more of the team back in the office as nothing beats face-to-face communication.

FNG: You recently announced the addition of an MT5 White Label offering. Where do you see the opportunity for that going?

Raj: The MT5 ecosystem is clearly an area of interest to brokers worldwide as they broaden their offering from the traditional FX and CFD space into a much wider multi-asset offering.  Metaquotes has a strong global brand and we have seen increasing demand from clients for this platform. This is a trend which looks set to continue.

We have seen particular interest for MT5 from firms in the hedge fund space and from professional traders. This all ties in nicely with our short to medium term multi-asset plans across the group. Watch this space – we’ll be making further announcements imminently.

FNG: Risk management has become a much-talked about topic lately in the FX broker world, as trading volumes have soared and clients look to trade more asset classes. How does IS Prime work with its clients to help deal with these issues?

Raj: This is where IS Risk Analytics (ISRA), part of the ISAM Capital Markets Group, adds value to our offering. ISRA has oversight of over $1 trillion per month in notional volume; their unrivalled expertise, experience, analytics and insights into the market help our clients to maximise P&L irrespective of the asset class.

ISRA supports and advises clients trading FX, CFDs, equities, cryptos and any other product, regardless of whether we offer them as a liquidity solution at IS Prime.

Multi-asset has undoubtedly been an area where we have seen increased demand but, in truth, as we also see from published figures of firms like PrimeXM as well as from our ISRA clients, this is not really a driver of volumes. It is still the same core products that make up 90% of volumes across the group: gold, FX majors, indices and oil.

FNG: From your perch, how have you seen the online trading industry change over the past year+ of COVID? And, what further changes (and challenges for brokers) do you foresee?

Raj: We are still seeing fantastic growth from the larger firms we work with who value our bespoke solutions which help to drive their growth alongside ours.

In terms of trends and challenges in this industry, there are now increasingly higher barriers to entry. Whilst it is easier than ever before to set up trading technology, CRMs and platforms, the increased regulatory pressure and the huge marketing expenses required when starting a brokerage mean that many firms struggle in their first few years.  Due to this we have seen a lot of interest in our start-up broker solutions where we are able to help significantly reduce the initial up-front outlay for these firms with the cost-effective combination of IS Prime’s liquidity and ISRA’s bridge technology.

Another interesting area of growth is in social trading, alongside the more traditional copy-trading flow that brokers have been seeing for several years now. What has really interested our clients is our proprietary hedging algorithms, helping us hedge this sort of flow more efficiently and effectively.

In terms of regional growth and opportunities, we have also seen a significant increase in volumes and onboarding activity from clients in APAC, particularly in the emerging FX markets there. It has taken some time for us to get a foothold in the region but now, having an SFC license and a well established client base, we are going from strength to strength.

FNG: What else can we expect to hear from IS Prime in the coming months?

Raj: Again, volumes at our clients are still focused on the ‘traditional’ asset classes but we are seeing continued interest in the crypto space which is proving profitable for brokers. We expect this to continue and have a couple of interesting announcements to make over the next few months including the launch of our digital asset offering. More details to follow soon!