Richard Bartlett

Centroid Solutions DMCC

RICHARD BARTLETT Head of Business Development at Centroid Solutions DMCC

Q Since we last spoke, I have seen in the media that you have had some big wins signing well-known brands to Centroid. How does this help your visibility?

Centroid Solutions as a brand has been in the market for quite some time now as a pure risk management company, however, since the launch of our new execution and aggregation technology at the start of 2019, it is great to start getting exposure for this side of the business too with some of the bigger players in the market especially. It demonstrates to existing and potential clients that the main players in the sector trust us and are happy to be associated with us. This can only be a positive and there will be more to come in the near future.

Q When a bigger brand takes on your product, is the decision-making process longer?

In most cases the larger the entity is, there are invariably more people involved in any key decisions, so for sure this does result in a lengthier decision process compared to a smaller operation. In the case where a larger firm is actively looking to add to their technology setup, or, is perhaps not happy with their incumbent provider, the decision-making time will be drastically shorter as long as you can clearly demonstrate the advantages and performance of your product, which thankfully at Centroid we are able to do easily.

Q One area that has gone under the radar is your exposure in Asia. How does it compare to Europe regarding volumes?

Our exposure in Asia is certainly growing and it is an area we are very focussed on pushing into a lot more heavily. In Asia, as I see it the volumes are very strong overall with many brokers on the ground that are not necessarily recognisable names globally, but have significant volumes due to the huge popularity of FX Trading in APAC as a whole. This is why we are so keen to expand on our client base and awareness in the region. We did have several business trips planned to Asia but with the recent Covid-19 restrictions etc we have not been able to get on the ground and physically meet with all our clients and prospects, as we normally prefer to do.

Richard Bartlett Head of Business Development at Centroid Solutions DMCC

Q What are the differences in business culture?

I have found often that Asian based businesses are far more ready to consider and review new technology even if they feel their existing tech is doing a good job. If there are clear benefits to a new technology, I also find they are more willing to make the change and the decision-making process is usually swift compared to many European based operations. One of the many reasons our technology is so popular in Asia, is the high level of automation that can be achieved. This is something that is definitely more favoured in Asia overall compared to Europe currently. Having said that, as the message is becoming clearer that intelligent automated systems can seriously improve risk adjusted returns compared to more traditional and manually focussed processes, the demand for these

types of advanced systems, such as we offer at Centroid, is increasing across Europe.

Q How do your solutions help clients in this often diverse market?

Our technology is all in-house designed and produced and we have a huge amount of experience and knowledge on both the technology, risk and physical trading side of the business throughout our development and technical engineering teams. This has allowed us to build a full technology suite that has no limitations and can be made to work seamlessly with any type of trading operation, under any trading conditions, be it, an FX Broker, LP, Hedge Fund or small bank etc. Another way our service assists our clients to tackle diverse market conditions, is down to our quant-based risk management system that can be tailored to each individual client’s needs. We are also able to automate the entire execution, hedging and risk management processes for our customers.

Q Has the lack of international travel hindered you, or has your service acted as the best advertisement you have?

As we are still able to demonstrate the strengths and scale of our various offerings via on-line demonstrations and we are still able to reach new and existing people via conference calls etc the impact of not being able to travel has not been too severe. However, there certainly are some negatives. For example, doing on-line meetings with a prospect that you don’t know, can never be as impactful, especially from a rapport point of view, compared to physically sitting down in front of them face to face. In addition, you don’t have the opportunity to take them out for lunch or dinner and for them to really get to know and trust you, which is how many deals are closed. So, for sure, the lack of travel has had an impact and I have missed not being able sit in front of clients and prospects personally. I will welcome the time that we are able to do this again.

Q What tips would you give for a budding Business Development executive on how to penetrate the Asian market?

Other than the old school way of grafting via cold calls etc, there are some more strategic ways to go about getting yourself in front of relevant prospects. I would say the most valuable way by far is to establish partnerships with other companies in the region that offer services to the same type of businesses you are going for. Naturally you must be careful that you only partner with companies that do not present a conflict of interest, so if you work for a bridge provider for example, you could work with PSP’s, Reg reporting firms, LPs, CRM providers etc and refer each other’s services to your respective clients. This is a great way to get your foot in the door via a warm recommendation from someone the prospect already knows or works with. Another good medium to use is LinkedIn to target key people from specific firms and also to release good quality content pertaining to your products benefits and strengths etc. This is a great way to gain exposure and pick up leads. Overall, the FX community is a relatively small sphere when it comes to market participants, so maintaining integrity and demonstrating a good understanding of your product and the prospects business will always stand you in good stead reputationally. This is something to be always conscious of when you are out there representing yourself and your company, as maintaining a robust reputation is paramount to continued success in business development.

Q Any new developments on the horizon for Centroid?

There are constant developments being released on a monthly basis which is great from a sales point of view, but it can often be tough to keep up with them all. This is however, a great problem to have. In the last few months alone, we have added a Market Impact feature that allows clients to monitor and track toxic flow. We also added an automated hedging feature, a trade copier and ability to give-up trades to MT4 and MT5 accounts. These are just a few of the recent updates. The next big update that is due to be launched in the coming weeks, is a feature that will allow brokers to build their own books of liquidity with bespoke depth and pricing tranches. I won’t go into too much detail on what else can be done with this feature but will be happy to explain more on this, and indeed our entire suite of technology to anyone individually. Feel free contacting me personally or any of the team for a chat and/or demonstration.

Website: www.centroidsol.com Email: r.bartlett@centroidsol.com

Playbell & CO

ANDREA STEFANI Playbell & CO Partner

Q Despite being a lawyer, you also were previously very active in the day to day running of a brokerage. Do you think this helped you understand the industry?

After 3 years working exclusively in financial services law, I was given the opportunity to participate in the set up of a Cyprus Investment Firm as a shareholder. As a lawyer, you can often be the best legal eagle, but can seriously lack practical knowledge, and this is truly applicable in areas such as financial services. It was then I decided to leave the law for 2 years and begin the operation of a brokerage so as to try to understand how the daily routine of the back office, dealing room is undertaken,

As I was lucky enough to work with some top people in the industry, I was able to really see the operational side of a brokerage and in particular the dealing room side. Many lawyers know the capital requirements for an STP or an MM, but do they really know what this means?

Practically, one of the main differences between an STP and an MM firm is how these firms handle the risk that arises from client orders. An MM holds an own account license and can therefore warehouse the exposure arising from client orders. Many brokers operate a hybrid model where they keep the majority of the exposure warehoused within their B Book and manage their risk by sending some of this flow to liquidity providers (A Book).

An MM licence will still require a reliable source of executable pricing. This could be via a price feeder or a FIX solution from a Liquidity Provider via a Bridge or naked gateway. The price feeder solution does not allow you, however, to offload risk and therefore is not in line with local regulatory requirements.

The architecture of the brokerage department is the same for an STP or MM firm with most reliant on a liquidity bridge. MT4/5 Administrator where the trading conditions and group plans are implemented and of course an MT4/5 Manager terminal where the Dealing Room can monitor client exposure. These are just some of the small models I was able to observe and understand. It is this exposure accompanied with many other practical involvements within different departments that benefited my wider learning of the industry.

Q My personal opinion of modern compliance staff, is that they understand the law incredibly well, however they are not willing to work with it to find a solution. They just seem to give a no to everything. How can this be remedied?

I am of the opinion that the compliance function is firstly too segregated, and although obligatory in most circumstances under the relevant legislation and directives, it seems to form an automatic barrier between the compliance department and the rest of the departments. I strongly believe that this is one of the most substantial reasons that ‘no” seems to be the favourable answer when advice is sought from the compliance department. What needs to be understood is that it is very difficult to find a solution for a matter when you have not been briefed as to why this needs to be achieved, what is the purpose, what will this gain for the firm etc. My advice would be that management work more closely with the compliance team to help them understand why certain models need to be implemented.

Q What tips can you give to any lawyers looking to go into compliance?

This particular field demands a high level of patience, practical interpretation and the ability to adapt with the new regulation and legislation. Laws are constantly changing to an increasingly dynamic landscape and there’s still much work to be done to ensure that the financial system works for everyone. For new lawyers, it would be ideal to start with a corporate/financial services traineeship before attempting to go to a compliance role or if from a litigation background, I advise to undertake a corporate placement before proceeding to a compliance role. I also believe that studying for the Cysec advanced examinations can also give a quick start to understanding the financial services sector in Cyprus. If you are a lawyer wanting to be part of continuously changing regulatory environment then compliance is probably the right choice for you.

Q Since we last spoke, I have seen in the media that

Centroid Solutions as a brand has been in the market for quite some time now as a pure risk managem

Q What tips can you give to any lawyers looking to go into compliance?

This particular field demands a high level of patience, practical interpretation and the ability to adapt with the new regulation and legislation. Laws are constantly changing to an increasingly dynamic landscape and there’s still much work to be done to ensure that the financial system works for everyone. For new lawyers, it would be ideal to start with a corporate/financial services traineeship before attempting to go to a compliance role or if from a litigation background, I advise to undertake a corporate placement before proceeding to a compliance role. I also believe that studying for the Cysec advanced examinations can also give a quick start to understanding the financial services sector in Cyprus. If you are a lawyer wanting to be part of continuously changing regulatory environment then compliance is probably the right choice for you.

Q Do you believe that the regulator actually understands how the FX industry works?

European regulators are among the best in the world at ensuring compliance with the letter and the spirit of the law. With that, it’s up to lawmakers to lead the discussion regarding how new assets are regulated.

One of the main issues that seems to arise is that each European country seems to interpret laws slightly differently and more specifically, MIFID II. For example, Introducing Brokers have been “banned” by Cysec, but seem to still be running under FCA and Barfin. There is the option to register as a Crypto asset firm under the FCA, but this option is not available in Cyprus.

Furthermore, what’s clear to us now is that currencies themselves are currently undergoing a massive technological upgrade. As of yet, we’ve not seen significant legislation designed to assist regulators to do their job scrupulously in the face of this budding fundamental shift.

Q With a huge global recession about to occur, how can Cyprus form legislation to help entrepreneurs and startups?

Of course, the implementation of legislation regarding blockchain, cryptocurrencies and distribution. We need to start moving with the fact that crypto assets are going to have a major role in shaping the future of money and laws as we know them today. Global innovation is inevitable, and we need to ensure that Cyprus remains one the most favourable hubs for financial services and financial innovation by working on achieving bespoke legalisation inclusive of systemic measures to ensure that operational risks are also covered.

Q Is there anything you would change about the Cyprus legal system from a users point of view?

I feel strongly that there should be a clearer framework regarding blockchain technologies and a more favourable outlook towards the digital upgrade of our financial system. This will make it easier to introduce tokenised assets and work with more advanced tools to benefit from the growing global trend of programmable money.

Q Is there life after FX for Cyprus?

The world of forex was a huge benefit for Cyprus over the last few decades but alas all good things must come to an end. The lack of volatility in the currency markets has meant that investors needed to increase leverage in order to sustain the gains they sought. A model that we now see is unsustainable.

The next generation of tradable financial assets is now available online and is growing in popularity and usage across the globe. Those who adapt to it the quickest have the most to gain.