Ten Essentials

8/3/2019 Ten Essentials

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10 essential points to consider beforechoosing a forex trading partner.


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Since its inception in 2001, FX Solutions has

consistently demonstrated the marketplace

value of its technology and the validity of itscore business vision

A pure technology enabler, FX Solutions was founded

with the primary goal of fully automating foreignexchange price discovery and trade execution. This

clear vision and focused strategy has proven to be

in line with the needs of the marketplace.

For three consecutive years (20042006) FXSolutions has appeared on the Inc. 500 list of the

fastest growing companies in the US.

Founded by two veteran banking executives with a

staff of ve, the company has grown to more than 40

professionals serving institutional and retail clientsin more than 100 countries.

In February of 2008, City Index Group, a leadingprovider of retail derivative trading services

announced the acquisition of FX Solutions and webelieve is an ideal partner to take FX Solutions to the

next stage of business growth.

1Growth is not

an accident.


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FX Solutions has always offered its partners and clients

a single-minded value proposition: To provide retail

foreign exchange traders with exactly the same

professional standards and advantages demanded

by interbank traders.

Successful foreign exchangetrading rests on three pillars:

pricing, execution, and

information.

In the interbank marketplace,

pricing is accurate because theinterbank market itself originates

the prices. Execution is secure

because the banks of theinterbank market guarantee

their prices. And information is

complete and timely because it is

delivered via primary newssources over private networks.

The founders of FX Solutions

realized, in 2001, that the Internethad made it possible to deliver

those closely guarded pricing,

execution, and informationadvantages to any foreign

exchange trader, anywhere in the

world, in real time.

By developing proprietarydirect link pricing and trading

technologies,

FX Solutions was able to makeits business model real. And in an

industry early in its regulatory

lifecycle, FX Solutionscommitment to retail traders

remains true and unique.

The results of this model

speak for themselves:

In 2007, Francisco Partners,

one of the leading technology-focused private equity investmentrms, became FX Solutions

partner, investing in the company

to accelerate a planned globalexpansion.

After the City Index acquisitionof FX Solutions, the combined

Group now employs over 400

staff across ofces in the UK,United States, China, Singapore

and Australia.

2

Financialstrength confirmsbusiness model.t.


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FX Solutions is not handicapped with

legacy infrastructure and non-scalable

systems architecture.

FX Solutions created our

platform by developinga superior technology.

Rather than overspending on

marketing to build market shareat the outset, the companys

management designed itsproprietary trading platform,

pricing engine, and price

extraction technologies to bescalable, easy to manage, and

simple to update.

The system went live in2002, we believe raising the

standard for the industry by

providing retail traders with allthe advantages previously held

only by interbank traders.

FX Solutions platform offers a

wealth of features including

multiple stop and limit orderson single trades, various

payment streams via multiplecommission splits, and

block trading and allocation

efciencies.

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Truly advanced technologymost be built from the ground up.

rex trading involves a substantial risk of loss and is not suitable for all investors


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reign exchange traders seek

ecution speed, pricing stability,

d trading accuracy.

FX Solutions pricing is deriveddirectly from EBS, the market

source. Trading with FX

Solutions gives you 24-houraccess to liquidity all in real-

time without latency.

No intermediaries exist

between the companys quoted

price and the originating prices.

Even during times of highmarket volatility, the companyspricing has consistently

proved itself to be stable and,

therefore, highly competitive.

As a result, FX Solutions is able

to maintain xed andcompetitive spreads during

virtually all market conditions.*

FX Solutions designed itspricing engine to provide fast,

accurate, and consistent

pricing.

To develop its pricing engine,FX Solutions founders

established a specialized rm

called Financial Labs, whichbrought together a team of

Harvard astrophysicists working

in algorithm-driven pricing andtrading. Financial Labs was sold

in 2006 to Bank of America, but

its price discovery technologyadvances continue to serve FX

Solutions clients.

hile we strive to display xed price spreads at all times, there may be occasions, however rare, where a

nicant market or world event may force us to widen spreads without prior notice to our cl ients. The last

e spreads widened was February 2009; NZD/USD widened from 5 to 7 pips.

4

The pricing engine drivesthe entire enterprise.


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X Solutions has automated many of the

anual tasks associated with the business

foreign exchange trading.

As a result, the company has

minimized and in many caseseliminatedthe overhead and

payroll costs needed to maintain

back ofce, administrative,andmarket-making staffs while still

being able to accurately complete

thousands of transactions a second.The company has reduced the

need for a traditional trading desk

since over 99.% of its trades areautomatically executed.*

Automation also enhances theefciency of our partners. For

example, white label partners areable to set up all of their client

accounts and manage both

margins and funding through anadvanced application called the

GTS Client Prole Manager.

A minimal trading desk is

maintained to oversee hedging,

manage exceptions, andaddress special client needs.

Human intervention is limitedto exception-based tasks, like

checking the accuracy of very

large trades.

or the month of November 2011, over 99% of all orders were automatically executed.

5Automation

cancelsinefficiencies.


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X Solutions systems were designed based on

e companys deep knowledge of foreign

xchange trading and the foreign exchange

arketplace. As a result, FX Solutions platform

nctions and service offerings are practical,exible, and effective.

The companys platform excels inmultiple waysincluding real-time

trading capabilities; a graphic user

interface that offers multiple userplatform layouts, colors, and fonts;

real time margin calculation for up to

six different leverage levels; andreal-time delivery of information and

news.

Institutional functions include

multiple revenue-sharing models,xed-scale rebates, and the ability

to segregate the institutions business

on its own server.

Institutions can also choose any or all

of FX Solutions services, whichinclude white label partnering in both

full turnkey and ASP delivery models.

The companys turnkey capabilities

include business planning, technicalintegration, branding and marketing/

sales, stafng and training, and trial

testing followed by a program launch.

6 Funtionality

is flexibility.


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X Solutions aggregates, measures, and

anages risk in real time via a fully

utomated risk management system.

FX Solutions risk

aggregation is driven by

constantly monitoring allcurrency activity, which

shows total buys/sells

per currency pair andthe net non-hedged

position for eachpair. Aggregation

incorporates

functionality todetermine the real-time

adjusted net capital

requirements. Pricesourcing is monitored

and can be changed

instantly if necessary.

The company begins

measuring risk through

the computation ofValue at Risk (VaR),

which is automatically

computed every 15minutes. FX Solutions

uses two weeks of 15-minute data to calculate

a covariance matrix

which indicates thevolatility of (and

correlations between)

each currency pair. Thisdata is then used to

compute the one-day

95% VaR for all currentpositions.

Finally, the companys

risk management

policies include thecalculation of

stress tests, which

provide ongoing checksand balances relative to

other risk calculations.

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Risk managementis inseparablefrom success.


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The architecture and organization of

FX Solutions trading applications enable

the company to offer its partners

capacity for growth without

having to change the platform.

All of the companys applications are

scalable. Various pricing rules can be

easily established for institutional,retail, and VIP accounts. For white

label partners, leverage and trading

parameters can be established by thepartner at the system level while still

allowing for specic client, or clientgroup, modications by authorized

administrators. Authority to change

trading rules can be granted todifferent individuals and easily set at

different levels.

Its overall sophistication coupled with

its powerful price discovery engine

make FX Solutions platform distinctlyadvantageous for both the companys

partners and individual investors.

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Real scalabilityhas no limits.


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X Solutions is recognized as a pioneer

seeking to establish wide-ranging

gulatory oversight of the foreign

change industry in the United States.

The company is registered with theCommodity Futures Trading

Commission as a Futures

Commission Merchant and is amember of the National

Futures Association.

In accordance with its total

commitment to the highest standardsof integrity and transparency, FXSolutions conducts SSAE 16 audits

on an annual basis. SSAE 16 is oneof the American Institute of Certied

Public Accountants Statements on

Auditing Standards.

The SSAE 16 test FX Solutions

internal controls and safeguards with

regard to hosting and processingcustomer data. The audit also

reviews the companys controls over

physical security, environmentalsecurity, computer operations,

information security, applicationchange, data communications,

client enrollment, client account

funding, and client adjustments and

withdrawals.

The company welcomes andencourages increased regulation in

the foreign exchange industry.

9Compliance is

the betterpart of integrity.


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oreign exchange of the G6 currencies transcends

tional politics and has proven its appeal to all

ealth levels throughout the world

FX Solutions currently operatesin more than 100 countries and

continues to expand operations at a

brisk pace.

Customer support is now offered in

four languages (English, Spanish,Chinese, Arabic). Four additional

languages (French, Japanese,

German, and Hebrew) are beingimplemented into our platform and

should be operational in 2012.

While the companys business base

is global, its product focus issingular: FX Solutions operates

exclusively in foreign exchange.

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Global reach & narrow focusare a winning combination.


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or more information about how

e can help you participate in this

st-growing investment category,

ease contact:

ntact our

stitutional

les team at

stitutional

fxsol.com

www.fxsol.com


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Ten Essentials