Looking for partners for starting Forex Brokerage Firm

[FXGiant]

Hi Folks,

I would like to introduce myself as trader in forex (spot currency trading, particularly GBPUSD, EuroUsd, AudJpy, GbpJpy pairs) for more than 2 years. Overall, I am satisfied with journey this far.
I am dropout from IIT Kanpur, BTech Civil Engineering ( dropped this year)

Myself and one of my friend, will open forex brokerage firm particularly targeted towards Indian Forex Traders.
Our competitors are Reliance Money(middleman) and Alpari (US company) and of course outside forex firms.

In 2006, daily retail trading volume from Indian clients was $250 million.
In the year 2009, this value is $1.2 billion. Our objective is to tap this market and grow bigger and financially stable before our competitors sight it as a "sector" or opportunity.

Our strategic edges are -
1) 1.4 pips to 1.9 pips spread on EuroUsd IN ALL MARKET CONDITIONS. Similar competitive spreads in other currency pairs as well.
2) All brokers charge $20-$30 fees for deposits. We will charge either $5 or charge nothing.
3) Direct cash deposit/cheque deposit. No bank wire or lengthy,inconvenient procedure!:clap:
4) No dealing desk.

Expenses would be $38,500 (initial) + $27,500 (first 18 months marketing and sales)
Also, $7,000 would be monthly expenses.
Totaling to $150,000 for first 18 months of our business.

Profit potentials are -
First 6 months - $0
7th to 9th month - $10,000
9th to 12th month - $15,000
13th month onwards - $10,000 monthly + $300,000 semiannually.

Myself and my friend have raised $30,000 collectively for this venture. We require $120,000 further for this venture.
Please see that, we are looking for only those who can join our time and can bring financial and/or strategic advantage to our team.

We don't want more than 7 partners in total (I hope that's good enough number of partners for a firm of this size). Also, all the partners will be automatically board members and hence, all decisions will be make by collective mutual agreement and total transparency.

So, if you can come up with $20,000 minimum backing and preferably a strategic value, then you are welcome to contact me at [email protected].

 

[ha0dho]

I would try Duncan Bannatyne or Peter Jones they might beable to help you.

 

[Tenapenny]

FXGiant.................I don't think so!

 

[everyonerich]

Our strategic edges are -
1) 1.4 pips to 1.9 pips spread on EuroUsd IN ALL MARKET CONDITIONS. Similar competitive spreads in other currency pairs as well.

thats not gonna happen pal.. even if you use institutional trading platform. spreads varies & depend on market condition.

want to start a brokerage firm aint the same journey as trader..

 

[FXGiant]

thats not gonna happen pal.. even if you use institutional trading platform. spreads varies & depend on market condition.

want to start a brokerage firm aint the same journey as trader..

Actually with the specific setting of liquidity providers depending on market condition, it would be a shift between the variable spreads to fixed spreads. Dukascopy will be one of the liquidity providers during initial stage.
This implies that during the news time, we will shift to Dukascopy, else, we would continue to work with most tight spread provider.

I agree that starting a brokerage firm is not the same as a trader, but homework is done and it took me last 4 months of work during weekends to figure out everything

Regards,
FxGiant.

*Small information, At the moment, we have raised $70,000 up till now, and total three partners now. So figure now is $80,000 left

 

[everyonerich]

Actually with the specific setting of liquidity providers depending on market condition, it would be a shift between the variable spreads to fixed spreads. Dukascopy will be one of the liquidity providers during initial stage.
This implies that during the news time, we will shift to Dukascopy, else, we would continue to work with most tight spread provider.

I agree that starting a brokerage firm is not the same as a trader, but homework is done and it took me last 4 months of work during weekends to figure out everything

Regards,
FxGiant.

*Small information, At the moment, we have raised $70,000 up till now, and total three partners now. So figure now is $80,000 left

generally, wannabe brokerage would get white labels to second tier/third tier solutions from big institution, do u know who has the biggest player share of fx market currently? :whistling( assume your brokerage dealing in fx pair only thou) & u have to know the answer before trying to create your 'brokerage' firm..

 

[FXGiant]

generally, wannabe brokerage would get white labels to second tier/third tier solutions from big institution, do u know who has the biggest player share of fx market currently? :whistling( assume your brokerage dealing in fx pair only thou) & u have to know the answer before trying to create your 'brokerage' firm..

DB, followed by UBS.

More than 20 pro traders( those who not only trade for themselves but trade for others) in India are my direct friends. 2 of them are already whitelables of AvaFx and FxSolutions. None of them are my partners though.

White lables don't have -
a) Direct control on the funds.
b) Cannot decide the spreads themselves.
c) Limited scope of progress.
d) Depend on the broker to whom they are white labled for clearing of the orders.


I am getting into this business because of $120bln daily retail trading volume, at the very least $1.2 bln comes from India.
Considering very conservative 0.6 pips gain for the broker, it generates a daily commission revenue of $72,000.

And, There are only 2 significant competitors at the moment. One is an subsidiary of a billion $ company which is nothing but an IB for CMSForex, other is Alpari's India office.

Others are international. If you can go through our strategic edge, the proposed firm is beating all the participants.

This far I have made good money from my trading on my own funds as well as for my clients. Only reason for leaving it I don't want to miss such market opportunities.

 

[everyonerich]

DB, followed by UBS.

More than 20 pro traders( those who not only trade for themselves but trade for others) in India are my direct friends. 2 of them are already whitelables of AvaFx and FxSolutions.

20 pro traders of 'your' friends hope doesnt have conflicting strategy or you all trade the same?

 

[FXGiant]

No, it's not.
They have different strategy.
They are just friends of mine, since we do the same job. After starting the brokerage firm, kick start will be given by such contacts of min

 

[ns1000]

Given that OTC derivatives trading is illegal in India, how do you plan to get regulated?

 

[FXGiant]

Given that OTC derivatives trading is illegal in India, how do you plan to get regulated?

That's not correct. Only thing that Indian nationals are not allowed to trade is anything on big margin. For that we will frame our offer letter for our clients before opening the account and article of association for the firm accordingly.

Regards,
Navneet

 

[ns1000]

I'm probably mistaken then. What sort of margin is permissible?

 

[FXGiant]

Given that OTC derivatives trading is illegal in India, how do you plan to get regulated?

I'm probably mistaken then. What sort of margin is permissible?

Permissible limit for individuals is 1:20 margin.
For corporates it is 1:50 margin.

However, there are clauses in it as well which can be used appropriately for getting through the proposed venture.
One of our friend has contacted a senior central bank official and he has given it clean chit. Remaining formalities will be done by our competent lawyer.

As an information, in case we get stuck at the last stage, we have solution for that as well. Register a company in Seychelles, Mauritius, BVI or anything similar for $5000 and Indian firm will act as IB for the same firm. Only drawback will add additional $7500 to our expenses ( company formation + account opening there etc).
This model is same as what RelianceMoney ( a subsidiary or Reliance Capital is following, although, they are true introducing broker of CMSForex).

Regards,
Navneet Pandey

 

[FXGiant]

Those who still don't appreciate the seriousness of this opportunity , here is something for you -

Indiainfoline.com
Forex trading with Alpari. Real time foreign exchange trading services. Free forex news, forex charts, analysis.
A major doubt was cast on Bo Beckman a successful money manager | Forex Magnates
http://www.bis.org/publ/rpfxf07t.pdf?noframes=1

 

[everyonerich]

Register a company in Seychelles, Mauritius is actually good. especially when youre not planning to publicly advertise the company and mostly only for trusted group of trader/professional fund management. Good luck with the starting brokerage company

 

[FXGiant]

Register a company in Seychelles, Mauritius is actually good. especially when youre not planning to publicly advertise the company and mostly only for trusted group of trader/professional fund management. Good luck with the starting brokerage company

If you go through the structure what Alpari or RelianceMoney are following (and possibly why no other firm is opening a direct brokerage firm in India) the solution we have come up is -

a) Registering and IBC from Seychelles or Mauritius.
b) Registering a fully owned subsidiary and Introducing broker of offshore company in India. IBs are allowed to assist clients to make the transfers to main company, and thus we can still accept deposits in INR and do the transfers on behalf of our clients.

Yes, I am exploring other options of financing from VCs or Angel funds for taking majority stake in the proposition.

Anyways, I will keep everybody updated about how it goes. I wouldn't delay it by more than 1 month of time to start the incorporation and other processes.

Regards,
Navneet

 

[NyFxTradeCom]

It sounds to me like you want to open a bucket shop! You talking 150,000 first 18 month!? Are you joking? You have to have at least 20 million net worth to start a ligit broker firm! Sounds to me like you looking for some quick money making machines! My friend live real!

Hi Folks,

I would like to introduce myself as trader in forex (spot currency trading, particularly GBPUSD, EuroUsd, AudJpy, GbpJpy pairs) for more than 2 years. Overall, I am satisfied with journey this far.
I am dropout from IIT Kanpur, BTech Civil Engineering ( dropped this year)

Myself and one of my friend, will open forex brokerage firm particularly targeted towards Indian Forex Traders.
Our competitors are Reliance Money(middleman) and Alpari (US company) and of course outside forex firms.

In 2006, daily retail trading volume from Indian clients was $250 million.
In the year 2009, this value is $1.2 billion. Our objective is to tap this market and grow bigger and financially stable before our competitors sight it as a "sector" or opportunity.

Our strategic edges are -
1) 1.4 pips to 1.9 pips spread on EuroUsd IN ALL MARKET CONDITIONS. Similar competitive spreads in other currency pairs as well.
2) All brokers charge $20-$30 fees for deposits. We will charge either $5 or charge nothing.
3) Direct cash deposit/cheque deposit. No bank wire or lengthy,inconvenient procedure!:clap:
4) No dealing desk.

Expenses would be $38,500 (initial) + $27,500 (first 18 months marketing and sales)
Also, $7,000 would be monthly expenses.
Totaling to $150,000 for first 18 months of our business.

Profit potentials are -
First 6 months - $0
7th to 9th month - $10,000
9th to 12th month - $15,000
13th month onwards - $10,000 monthly + $300,000 semiannually.

Myself and my friend have raised $30,000 collectively for this venture. We require $120,000 further for this venture.
Please see that, we are looking for only those who can join our time and can bring financial and/or strategic advantage to our team.

We don't want more than 7 partners in total (I hope that's good enough number of partners for a firm of this size). Also, all the partners will be automatically board members and hence, all decisions will be make by collective mutual agreement and total transparency.

So, if you can come up with $20,000 minimum backing and preferably a strategic value, then you are welcome to contact me at [email protected].

 

[FXGiant]

It sounds to me like you want to open a bucket shop! You talking 150,000 first 18 month!? Are you joking? You have to have at least 20 million net worth to start a ligit broker firm! Sounds to me like you looking for some quick money making machines! My friend live real!

Not quite correct.

$20 Mln is required when you are in US and also apply for NFA regulation.

Here is how the budget is brought so less -

a) Legal and accounting will be get done at very low cost as both a competent attorney and CA known to us for long time.
b) Already have an office space. So no need for lease spending on that
c) Employees don't demand $2000 as in US. 11 Employees will be their at salary of $400.

I wouldn't coverup every component of cost, however, those who contact me by email will get detailed business plan addressing every important component.

yes, it will be "market maker" model. However, we would do -
a) Educate the traders with free educational materials.
b) Hedge the positions of account which we segragate on quarterly basis, re-evaluated on monthly basis.

By the way, we will use Hotspotfxi as liquidity provider, so those whose positions shouldn't be hedged will get direct access to them.

Regards,
FxGiant

 

[FXGiant]

Two important additional informations

Hello,

Following are two important information about our progress till now -

a) Including customer's cost sharing, bonuses and maintenance of prime brokerage account while still giving the clients most competent services, the total cost of the firm would be $350,000. I don't need to explain every nitty gritty of it on the forum, those who qualify for the second and wish to know more can contact me at [email protected]

b) 'In principle' we are financed to $350,000 with a total of 3 partners, all from India.
However, being consistent with my policy for least number of partners, if anybody is interested in partnering, then it should be a total of 2 partners + the individual need to finance $350,000. The stake in business, level of ownership, business plan, all projections could be discussed via email.

Regards,
FxGiant

 

[TaKiii]

1.2 bln comes from india, in the form of business transactions. Your retail bucketshop will not be able to 'tap' that market. Unless you want to open the traditional trading house where you cold call clients and get them to do their OTC transactions through you. Thne you can apply whatever spread you want to their trade.

Otherwise, you need to do ALOT more research and realise that speculating in india is extremely difficult to do legally. And promoting that is probably going to be even harder with corrupt industry. If there are big local players, you will simply be removed out. I dare say it would only cost them 20k to get you shut down by authorities.

Your best bet is to open up offshore, have realistic goals, and start small. If you are planning to do it locally, you'll just hurt yourself until laws etc change.