RegTech
firm Muinmos and technology provider Brokeree Solutions have announced a
partnership focused on proprietary trading compliance and risk management for
regulated brokers. This move comes amid ongoing discussions about the
legitimacy and regulation of prop trading in the financial industry.
Prop Trading Compliance: Muinmos
and Brokeree Solutions to Address the Issue
The
collaboration integrates Brokeree’s Prop Pulse technology for account
management and risk mitigation with Muinmos’ client onboarding platform. This
combination is intended to offer FX brokers tools for regulatory compliance and
risk control in prop trading operations.
“The
conversation around prop trading is highly negative these days, but for
regulated brokers who have the right controls and risk management in place,
prop trading presents an opportunity for an additional revenue stream,” Remonda
Kirketerp-Møller, Founder and CEO of Muinmos, commented. “Our combined
offering enables the firms to offer a compliant and at the same time
competitive prop trading option.”
The
partnership aims to address concerns within the industry regarding risks
associated with prop trading. In a recent interview with Finance Magnates, PipFarm’s CEO, James Glyde, explained that those risks are “incredibly hard to manage.”
“The
mechanics of prop trading are completely different from a CFDs broker where you
have a deposit and margin,” he continued, “you can either use that to transfer
the risk to the liquidity provider, or you can accept the risk. So the
mechanics are completely different, making the risk similar yet different.”
Muinmos and
Brokeree assert that they have found a way to address this issues, including
the associated reputational risk.
“We are
very aware that many regulated brokers are concerned that their reputation will
be tarnished if they offer prop trading,” Andrey Kamyshanov, Co-Founder and
Managing Partner at Brokeree Solutions, added. “With Muinmos’ compliance
expertise and Brokeree’s account management system for prop trading firms,
regulated brokers can be reassured that they will have a robust offering to
enable them to thrive now and as regulation is inevitably introduced.”
Both
companies report having client bases among regulated brokers and express a
commitment to compliant trading practices. They indicate an intention to work
with regulators to implement controls without unduly restricting legitimate
financial activities.
Brokers Enter the Prop
Trading Space
Although
the prop trading industry doesn’t enjoy a good reputation, didn’t the CFDs face
similar challenges? Regulators worldwide warn against prop firms, much like
they once cautioned against brokers.
While many
of these warnings are justified, and some unscrupulous firms advertise
prop trading as “video games,” the market also includes honest
companies that prioritize safety standards.
CFD brokers
are now introducing a new quality to prop trading. Thanks to their regulatory
compliance, they provide investors with a much higher level of service and
guarantee fund withdrawals.
From late
2023 to May 2024, five different firms from the traditional CFD sector entered
the industry, including
OANDA, Hantec Markets, IC Markets, and Axi. A comparison of their offerings
is available below:
Since then,
other brokerage brands have decided to try their hand at prop trading. Among
them is
ThinkMarkets, which launched ThinkCapital, offshore
CFD brokers AXE, and FundedBull, founded
by a former XM veteran.
RegTech
firm Muinmos and technology provider Brokeree Solutions have announced a
partnership focused on proprietary trading compliance and risk management for
regulated brokers. This move comes amid ongoing discussions about the
legitimacy and regulation of prop trading in the financial industry.
Prop Trading Compliance: Muinmos
and Brokeree Solutions to Address the Issue
The
collaboration integrates Brokeree’s Prop Pulse technology for account
management and risk mitigation with Muinmos’ client onboarding platform. This
combination is intended to offer FX brokers tools for regulatory compliance and
risk control in prop trading operations.
“The
conversation around prop trading is highly negative these days, but for
regulated brokers who have the right controls and risk management in place,
prop trading presents an opportunity for an additional revenue stream,” Remonda
Kirketerp-Møller, Founder and CEO of Muinmos, commented. “Our combined
offering enables the firms to offer a compliant and at the same time
competitive prop trading option.”
The
partnership aims to address concerns within the industry regarding risks
associated with prop trading. In a recent interview with Finance Magnates, PipFarm’s CEO, James Glyde, explained that those risks are “incredibly hard to manage.”
“The
mechanics of prop trading are completely different from a CFDs broker where you
have a deposit and margin,” he continued, “you can either use that to transfer
the risk to the liquidity provider, or you can accept the risk. So the
mechanics are completely different, making the risk similar yet different.”
Muinmos and
Brokeree assert that they have found a way to address this issues, including
the associated reputational risk.
“We are
very aware that many regulated brokers are concerned that their reputation will
be tarnished if they offer prop trading,” Andrey Kamyshanov, Co-Founder and
Managing Partner at Brokeree Solutions, added. “With Muinmos’ compliance
expertise and Brokeree’s account management system for prop trading firms,
regulated brokers can be reassured that they will have a robust offering to
enable them to thrive now and as regulation is inevitably introduced.”
Both
companies report having client bases among regulated brokers and express a
commitment to compliant trading practices. They indicate an intention to work
with regulators to implement controls without unduly restricting legitimate
financial activities.
Brokers Enter the Prop
Trading Space
Although
the prop trading industry doesn’t enjoy a good reputation, didn’t the CFDs face
similar challenges? Regulators worldwide warn against prop firms, much like
they once cautioned against brokers.
While many
of these warnings are justified, and some unscrupulous firms advertise
prop trading as “video games,” the market also includes honest
companies that prioritize safety standards.
CFD brokers
are now introducing a new quality to prop trading. Thanks to their regulatory
compliance, they provide investors with a much higher level of service and
guarantee fund withdrawals.
From late
2023 to May 2024, five different firms from the traditional CFD sector entered
the industry, including
OANDA, Hantec Markets, IC Markets, and Axi. A comparison of their offerings
is available below:
Since then,
other brokerage brands have decided to try their hand at prop trading. Among
them is
ThinkMarkets, which launched ThinkCapital, offshore
CFD brokers AXE, and FundedBull, founded
by a former XM veteran.
This post is originally published on FINANCEMAGNATES.
