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After three years as Head of Sales, Stavro D’Amore has assumed the leadership position of Chief Executive Officer at Australian retail FX firm FXTG.
Mr. D’Amore joined FXTG’s Melbourne operations in September 2011 after various portfolio management and consultancy roles at institutions including Bank of America / Merrill Lynch, FPA and a brief stint at HCT Funds Management, however the series of events which have led to Mr. D’Amore’s appointment are as interesting as the structure of the company itself.
FXTG came into being in late 2009, initially in London under a license provided by the Financial Services Authority (latterly Financial Conduct Authority). The company was established by, and had shared ownership interest with Israel-based Dealserv, the service provider behind now-defunct unregulated brokerage Forex Place (4XP) which ceased operations last year.
Very shortly after establishing in London, FXTG surrendered its Financial Services Authority license, in favor of Australia’s highly coveted AFS license from the Australian Financial Services Commission, with Melbourne-based CEO Yossi Ashkenazi at the helm, however the demise of 4XP along with the entire former management of FXTG’s Australian operations has led to FXTG taking an entirely new corporate direction with a ground-up restructure following the purchase of the firm by flamboyant retail FX industry figure Aviv Talmor.
LeapRate today spoke with Mr. D’Amore, who enthusiastically detailed the company’s transformation from an ailing subsidiary of the ill-fated 4XP, to a forward-thinking and avantgarde firm which is set to be a prominent entity within Australia’s highly respected retail FX industry. Mr. D’Amore explained that shortly after the collapse of 4XP and Dealserv, the two regulated entities which had been part of the Dealserv-provisioned group were acquired by Mr. Talmor in the form of Cyprus-based SkyFX and Melbourne-based FXTG.
Mr. Talmor had begun to embark on an entire new vision for the firm, with Mr. D’Amore cited as the industry professional with 13 years worth of experience that would lead the firm. The technology that Dealserv had used before, along with its MetaTrader 4 servers, originally stationed in Caesaria, Israel, was bought alongside the two entities and relocated to Tel Aviv, where it was adapted considerably by adopting LMAX as a liquidity provider, and changing the execution model to provide A-book order flow as well as B-book.
The next apparently necessary but draconian step taken by the company’s new owners was to replace all of the former management, including former CEO Yossi Ashkenazi, with a newly selected management team, under Mr. D’Amore. With regard to this particular move, Mr. D’Amore explained to LeapRate today that “the replacement of the former management team was an absolute necessity for the survival and future growth of the firm. The redundancies included the entire previous management team and all of the Dealserv managers. Mr. Talmor then appointed new management of his selection.”
“I was in Israel last month” continued Mr. D’Amore. “Whilst there, I put my case to Mr. Talmor that I should be considered to run the company. He agreed, we went through all of the critical business information and I was appointed CEO. We then went to a vote and terminated the employment of Hagar Lippa, the local Director. Following the redundancies of Mr. Ashkenazi and Ms. Lippa, we engaged in a full clean up of the business and introduced a new $2.5 million from investors.”
The company is currently in the process of preparation for moving to its new office, which Mr. D’Amore explained today will take place in approximately a week’s time, and will be located in Melbourne’s Central Business District.
“The changes that have been made have had an extremely positive impact on the mood and performance of every employee within the company” said Mr. D’Amore. “Those who have moved on had to go, and now we have Mr. Talmor as a 100% shareholder, and Danial Kirby, an Australian businessman who serves as the new local director, and works at the firm as Chief operating Officer, and myself who as well as fulfilling the role of CEO, is the Responsible Manager for regulatory matters, reporting to the Australian Securities and Investments Commission (ASIC).
In terms of infrastructural and commercial changes, the invoking of liquidity provision from LMAX as well as a feed from banks resulted in the firm no longer taking services from Leverate, in order to process more A-book order flow, with average spreads, according to Mr. D’Amore at 0.22 average.
“As far as my focus during the initial stages of the transformation is concerned” stated Mr. D’Amore, “I have three priorities, the first being to clean the mess which I inherited from the former management team, then the second being to stablize the operation in its new form, then grow the business into the future. We are taking steps to grow currently, having opened an office in China. I put together a whole business plan and brought $100,000 in capital from a Chinese investment manager, and the Chinese division is now established under the name of Australia International FXTG” explained Mr. D’Amore.
“Some of the organizational changes that needed to take place included cutting expenses that were not required, for example the previous CEO had a company car which generated costs but did not add to quality” continued Mr. “I changed the company’s auditors to a more efficient company that charges less, and organized a new office which will be located in Collins Street in Melbourne in place of the previous St Kilda Road address, to gain a better facility as well as a better price.”
“So far, a lot of money, amounting to over $600,000 has been saved from cutting and amending costs but not subsituting quality” concluded Mr. D’Amore.
At the time of its demise, 4XP had been subject to a litany of publicly available complaints from its customers, claiming that the firm had failed to process withdrawals, culminating in the self-regulatory organization FMRRC, (Financial Market Relations Regulation Center) revoking its membership in November 2013.
4XP, whilst unregulated, had been widely recognized to have been registered in the British Virgin Islands. Last year, however, following a regulatory warning to investors, the British Virgin Islands Financial Services Commission issued a cease and desist order to 4XP, requesting immediate cessation of operations. The company’s response to this was to issue its clients with a notice stating that it was not able to process withdrawals or deposits, however, as the British Virgin Islands authorities had no jurisdiction over the company, operations continued until the firm closed its doors late last year.
Subsequent to this, the British Virgin Islands Financial Services Commission had stated that 4XP was never licensed by the organization, therefore was unable to affect withdrawals or deposits, as it has no jurisdiction over a firm which it does not regulate.
During its final two years of operation, 4XP was restructured, providing its sales department with a new business unit, under the name of FXSales. This unit performed the purpose of an outsourced call center, which could provide services from within Dealserv’s offices to many subsidiaries, and firms associated with Dealserv, including Cyprus based SkyFX, 4XP and FXTG.
Without the burden that is previous structure and former owners placed upon it, FXTG is now able to transform and grow, and with the company located in a region which is synonymous with trade partnerships in the Asia Pacific nations, the firm’s continued existence and growth, contrasting to 4XP’s demise, provides a clear reinforcement that retail FX firms established in strong jurisdictions with high quality regulatory oversight and an experienced management team have every chance of going the distance.
LeapRate wishes Mr. D’Amore and the team at FXTG great success in its ventures.