Comment: Trading provides local presence, global reach

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Comment: Trading provides local presence, global reach

In this feature, ActiveTrades Brendan Davis, pictured below left,  looks at how the availability of a well-educated and skilled workforce in The Bahamas, coupled with cutting edge technology gives a company the perfect platform to thrive.

As many wise men realised throughout history, in life the only constant is change. Our world is permanently evolving, and the pace of change is accelerating, driven by technological advances, socioeconomic dynamism and above all by the unstoppable march of history itself, as dramatic changes in the global geo-politics and the coronavirus crisis very recently reminded us of.

The economic, political and social changes that will arise in the aftermath of the covid-19 crisis are very likely to, at least to some degree, shape the way we will do business and interact with each other for years to come. This dynamism is present in all spheres of life and demands from firms like ours the ability to constantly evolve and adapt to new challenges and landscapes. 

Today we employ more than 20 locally based finance professionals, who among them are proficient in seven different languages"

Technological advances in hardware, software and telecommunications mean the way trading was carried out as recently as in the early 2000s, quite often by phone, sometimes even face to face, with clients visiting the broker's office to open or close positions, has fundamentally changed.

Ultra-fast

Today service providers must offer ultra-fast execution, with latency measured in single digit milliseconds, available on a range of desktop, web and mobile platforms through which clients can access a vast array of different financial instruments, including foreign currency pairs, stocks, commodities, indices, ETFs and fixed income.

The way trading decisions are made also evolved; today's trader is increasingly sophisticated, relying on cutting edge technology, with advanced chart packages supporting complex order types. 

The traditional broker has evolved to become more than just an intermediary; today we transcend being a pricing and execution provider, we are also developers of cutting-edge technology. It goes without saying that competitive pricing, premium customer service and a vast plethora of educational resources are also a must, for any broker wishing to remain competitive.

Challenges

But technology is but one of several competitive challenges we are faced with; Clients are culturally varied and geographically dispersed, through many countries across several continents, requiring a level of service that can be complex because of the different languages, cultures and varied time zones we need to cover.

We also find that clients based outside of Europe tend to have different trading requirements, often demanding features that either aren't available or are overlooked in the old continent, such as higher leverage and a wider offer of educational resources. 

Today, a large percentage of retail traders reside outside of Europe and the USA. Clearly, financial trading is no longer an activity exclusively reserved for those who are close to large financial hubs, such as London or New York; many in Asia, Africa, South and Central America, in the Caribbean, too, follow the markets avidly and are interested in trading. For these reasons, as interest for our products and services grew outside our traditional territories, a decision was made to expand beyond Europe. The Bahamas serves as an ideal hub for servicing these clients.

So why The Bahamas?

Besides the natural beauty of the islands, nice weather and friendly locals, there were other reasons behind our choice; Chief among these, the availability of a well-educated and skilled workforce.

The Bahamas is internationally renowned as a centre for financial services and we assumed it would be possible to recruit locally based individuals with experience in the industry; because of the relative complexity of the products we offer and diversity of our client base, our staff tend to be multilingual, university level educated and with work experience in the finance sector.

Our assumption proved to be spot-on, as today we employ more than 20 locally based finance professionals, who among them are proficient in seven different languages.

Legal

Another important factor was the legal regime; the Bahamas legal system is based in English Common Law and for us this was extremely important. However, the reason that weighed the most in our decision to establish a hub in The Bahamas was the presence of a reputable and globally respected regulator; that was paramount, and we found it in the Securities Commission of the Bahamas. 

The country and the respective regulator are extremely important when it comes to making such a decision; ending up based in a jurisdiction with poor global reputation is damaging for any financial firm, as trust is one of the most, if not the most, important factor for many clients when they are choosing a provider.

In this respect, once again, The Bahamas proved to be the right choice; ActivTrades was granted a Securities Industry Act Licence from the Securities Commission of the Bahamas on 14 May 2018, having since onboarded several thousand globally based clients.  

Brokers

The success story of brokers in The Bahamas is founded, to some extent, on the attractiveness of The Bahamas as a business destination given the geographical location of the islands and the excellent transport links with the Americas and Europe; there are several direct flights to the main business centres on both sides of the Atlantic.

Last, but not least, is the social and political stability of the nation, as well as a growing international reputation for transparency, to which the adherence to the Common Reporting Standards of the Organisation for Economic Cooperation and Development pays testimony to the commitment to being a well regulated international financial centre.

As the number of international clients choosing to be onboarded under our Bahamas office grows, so will the need for recruitment of more locally based talent. The increasing popularity of online trading across the planet and particularly in South and Central America will drive the success of The Bahamas as a trading hub.

In today's challenging environment, an online broker's success undoubtedly results from the ability to analyse and plan; to adapt and evolve. Over the last few years online trading faced several regulatory challenges, such as ESMA in Europe.  

Competitive

Competitive online brokers have embraced the spirit of the challenge, recognising the legislation as being focused on the protection of retail clients. They have identified great growth opportunities in other regions and created new lines of products, specifically designed for institutional clients, which include white and grey label solutions, API and money management tools. Agile firms have also sharpened their focus on business partnerships, such as those established with IBs and affiliates.

About ActivTrades:

ActivTrades was founded in 2001. Our roots are European, having started in Switzerland in 2001 and moved to London in 2005. In less than two years we have been able to replicate in The Bahamas the success previously obtained in Europe, which is a testament to the strength of Bahamian talent. 

 As we move forward, we expect to continue the expansion of our firm's global reach; besides our London head office and its branches of Sofia and Milan, as well as Nassau, of course, we are currently at the final stages of obtaining a licence from the CSSF in Luxembourg, where our local office is ready to start operating once the licencing process is complete.

Our Luxembourg base will allow us to continue serving EU-based clients on the post-Brexit transition period, which starts from the end of December 2020. Find out more at www.activtrades.com

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