Forex regulation, liquidity, and what’s ahead: Valutrades CEO Graeme Watkins speaks


LeapRate Exclusive Interview… We are pleased to speak today with Graeme Watkins, CEO of FCA regulated retail forex and CFDs broker Valutrades.

An LCG veteran, Mr. Watkins joined Valutrades just over a year ago and has helped steer a recapitalization at Valutrades and launch of a new website. With big plans for the future.

Valutrades was originally set up about four years ago as the FCA-regulated UK arm of Indonesia-based retail forex broker Monex Investindo Futures, that country’s leading online broker. (Not to be confused with Monex Group of Japan, an unrelated company). At the time, Anil Bahirwani was CEO of Monex. However Bahirwani left active management of Monex and took direct control (along with business partner Mohandas Lakhiani) of Monex UK, renaming it Valutrades in early 2014.


LR: Hi Graeme, and thanks for joining us today. Before we get to 2017, how did 2016 go at Valutrades? What would you term the company’s key highlights and accomplishments last year?

Graeme: First, thanks for the opportunity to join in participation with LeapRate’s great community and I wish you a successful year ahead.

I’d be lying if I didn’t say 2016 was a challenging year for Valutrades and I feel the wider industry as a whole. Increasing costs of lead generation and a heavy regulatory burden were hot topics for us. We did however have several very positive highlights to the year. Most noticeably we finished the year with the most number of active accounts we have ever had and we completed development of our in house affiliate portal which we believe now leads the market for functionality and transparency.

LR: December saw a number of regulator moves in Europe around bonus payments, leverage, and negative balance protection which are sure to reshape the FX and CFD sector. How do you view these changes, and what issues and opportunities they present to Valutrades and to other leading Forex & CFD brokers in 2017 and beyond?

Graeme: As I mentioned this was definitely something we were aware of and spent a lot of time discussing. I think the industry has to take some responsibility for the measures now being applied by allowing both Binary Options and offshore jurisdictions such freedom without self regulating in the past.

In the long term we see it as an opportunity. As an FCA licensed broker that does not engage in many of these techniques, we will be much less effected. However in the short term we will be focused on lobbying regulators for fair and reasonable rather than excessive regulation.

LR: Thinking back nearly two years now to the Swiss Franc spike of January 2015, from your perspective how has the FX liquidity and prime brokerage business changed? How does Valutrades go about managing its liquidity and PB relationships?

Graeme: It has certainly changed the market.

In my early years before the Swiss Franc event I had learnt the trade mostly in a institutional, pure STP prime of prime setups. The mission was simple – maximum volume, and don’t worry about risk as we are STP.

The Swiss Franc event reset that with counter-party risk now viewed in conjunction with trading risk. Volume is not key anymore and maintaining a strong balance sheet, reducing high frequency and high leveraged clients are seen as positive business steps.

We are well positioned at Valutrades. Having completed several refinancings last year we are now capitalized to such a level that we could lose multiple PB relationships and all funds deposited and still be operating freely. In any event, that is very unlikely as we now place an emphasis on selecting only LPs and PBs with strong balance sheets, and evaluate liquidity not only in normal market conditions but extremely stressed ones as well.

While the Swiss Franc event was shocking and it hit a reset switch on many business models, I believe the industry has adjusted and for the most part moved on. What I think is much more interesting and will be keeping traders on edge this year is the flash crashes as these are not exactly one-off events and raise some very large questions on the efficiency of the markets.

LR: What else can we expect to see from Valutrades in 2017?

Graeme: In an industry that’s increasingly developed and commoditised it’s becoming difficult to spring new things on the market. Gone are the days when a new trading platform will net you thousands of new clients.

Instead, Valutrades will focus on delivering simple principles to a high level which clients deserve, instead of what the FX industry has a reputation on delivering. Some of these principles include deep liquidity with transparent execution, clear and prompt client engagement through our website, client portal and social media, and absolute security of funds with immediate access.

There is also a gut feeling telling me that this year will be very reactive not only to regulatory change but round two of Brexit and Trump plus as always the things we least expect. We are very excited for the challenge ahead and look forward to sharing it with LeapRate.

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Forex regulation, liquidity, and what's ahead: Valutrades CEO Graeme Watkins speaks

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