Client Facts:
- Counterparty type: CFD API
- Established: 1998
- Regulated by: CySEC & other jurisdictions
- Key metric: 2.9 million clients
Overview
An award-winning online broker within excess of 700 staff and clients located in more than 100 countries was looking to review its liquidity provider relationships back in 2018.
Challenges
Whilst the existing arrangements were fit for purpose at the time, limitations here meant that the new assets clients were demanding could not be added - the broker wanted to ensure its clients could trade with reference to market prices, rather than just those made by the liquidity providers themselves.
Consultation
A review of the liquidity options on offer led the broker into conversation with CMC Markets Connect, who brought with them a natural advantage in terms of scale of the operation. With a portfolio of around 10,000 different assets on offer, the broker was able to pick and choose the instruments its clients wanted to see. This facilitated coverage not only in sectors such as energy commodities and single stock CFDs over a standard API connection, but also allowed indices pricing to be offered on both a cash and futures basis.
Results
The bilateral approach taken by CMC Markets Connect when it came to discussing commercial terms was also highlighted as being a key differentiator. “Other liquidity providers will push for high volumes from the outset, but CMC took a far more pragmatic approach, understanding that as our business grew, we would be able to pass more flow to them. As a result, thanks to our own growth over the last three years, we are now putting significantly more volume in their direction.”
The Future
The proactive stance taken in terms of customer relations by the institutional team at CMC is also seen as being atypical in an industry which can often be dominated by a one-size-fits-all expectation. As a result, CMC Markets is now the broker’s primary liquidity provider and there are aspirations to add new instruments such as treasuries and options, catering not only to the growing client need but also providing a degree of protection for when the inevitable equity market correction does arrive.
