Arif Alexander Ahmad talks about the need for trust and transparency in today’s industry, building relationships, and creating value for clients.Continue reading
Scandinavian Capital Markets is proud to announce a further expansion of our trading platform offering, with the addition of multi-award winning cTrader, available to both their Retail and Institutional Clients.
Trusted by millions of traders worldwide and supported by a large community of partners, cTrader incorporates the most advanced tools, offering state-of-the-art technology for fast entry and execution, asynchronous order processing and Level-II pricing.
Furthermore, it combines a wide range of advanced order types, as well as cutting-edge tools for effective risk management, helping investors to better inform their trading decisions. The platform’s web, desktop and mobile interface also allows for seamless, uninterrupted trading anytime, from anywhere in the world.
The combination of cTrader, alongside a deep, multi-asset liquidity pool from an extensive list of Tier-1 financial institutions through Scandinavian Capital Markets’ established relationships, makes the platform an ideal choice for every trader.
Michael Buchbinder, Managing Partner at Scandinavian Capital Markets commented: “We are delighted to be extending our platform offering and believe that cTrader is an ideal platform for both beginners and more experienced traders. Professional traders can utilise their skills through cTrader’s API protocols, whereas novices can benefit from the platform’s advanced trading tools and risk management features in order to better perform their strategies. We are advocates of robust risk management and always try to help our clients make sound trading decisions. cTrader now allows us to provide the clients with all the necessary tools and resources in order for them to succeed and strengthen their trust towards our company”.
Alexander Geralis, Business Development Manager at Spotware, commented: “We are pleased to welcome Scandinavian Capital Markets to our growing list of brokers. Scandinavian Capital Markets is a broker who shares our ‘Trader’s First’ mentality. We know that Scandinavian Capital Markets’ traders have been eagerly awaiting to use cTrader and at the same time, respect how the company puts in a great deal of effort to understand the platform and its benefits before concluding that it is exactly what their traders are after”.
The cTrader platform can be downloaded from the Scandinavian Capital Markets’ website.
We sat down with Daniel Hunter, global asset manager to talk about Forex as an alternative investment. Since the 1990s, start of his career, Daniel has been an advocate of alternative asset classes. Now those can vary. Today it can be Forex. It can be anything from hard commodities. It can be art. It can be wine…Continue reading
Trading today as a retail trader can be challenging. This is why many retail traders seek to have their money managed by a professional money manager. Up until recently there have been limited options for money managers to manage multiple accounts at once. Often times it required them to login individually to each account in order to place trades. As you can imagine trying to manage multiple accounts for clients in this manner can be downright impossible. The Gold-i Multiple Account Manager makes directing managing investor accounts much easier. Traders can manage accounts for multiple clients and assets from one platform and master account.
The Gold-i MAM makes it easy to manage multiple accounts. With the simple installation, money managers can quickly get up and running. The plugin creates a one-stop-shop for managing multiple accounts with single block order entry. The Gold-i MAM includes:
- Single screen order management between master and sub-accounts
- Ability to quickly add new sub-accounts
- Single block order entry
- Customizable allocation methods
- Commission configuration that can be passed to sub-accounts
For traders that want to manage multiple accounts or money managers, the MAM tool is ideal for seamless execution.
Getting started with Gold-i MAM
Scandinavian Capital Markets offers the Gold-i MAM combined with the popular MT4 platform. When a new money manager is onboarded Scandinavian Capital Markets provides them with a MT4 client terminal, Gold-i Multi Account Management Software, and Master Account login details. Installation is a straightforward process. Unlike other MAM software available on the market, the Gold-i MAM does not require any license files to be downloaded or installed. The money manager simply installs the MT4 client terminal and logins into the account using the Master Account login details provided. This is the exact same process as someone logging into a normal MT4 trading account.
Then, in order to control the investor accounts the money manager would install the Scandinavian Capital Markets branded Gold-i MAM software, and login to that software using the Master Account login details. By default though when a customer is onboarded under the MAM they automatically join the MAM and receive trades based on their equity proportional to the overall equity of the MAM. So, it is possible for a money manager to get started trading the MAM without installing the Gold-I MAM software.
Using the Platform
The sleek platform offers an easy way to setup and manage your investor accounts in one screen.
Down the left-hand side, you’ll be able to see the Master Account Details including:
- Login number
- Deposit Currency
- Client Group
- Active/Inactive Users
- Allocation Rules
You’ll notice the window splits into three areas.
Top: In the top area you’ll be able to see the list of all the sub-accounts. This will display configuration options including exclusion type, risk multiplier, account leverage, balance, equity, and margin..
Exclusion type – This is used when you want to add or remove an investor from the MAM. With the Gold-i MAM it is possible to temporarily remove a person from a MAM, and add then back in at a later time. Usually, a money manager does this if an investor has specifically requested that they not take part in certain pairs/trades.
Risk Multiplier – Some investors prefer to take more or less risk relative to the equity in their account. The risk multiplier provides a simple way for money manager to control the risk each investor takes per trade.
Middle: Here, you can track your current open orders under the master account. You can toggle the expansion of the screen, pull in the latest orders, as well as configure which columns to display.
Bottom: The final section provides you a complete breakdown of a Master Account order. Money Managers can quickly identify how much an investor has received of an open order in this window. .
By bringing all the order management to one screen, users can quickly navigate trades. The split sections make it easy to track and execute orders across multiple accounts.
Gold-i MAM contains modules that allow users to define allocations in two ways: Master Account Allocation and Cash allocation. Both follow the same basic concepts.
Equity: Master accounts distributes trade volume across the sub-accounts based on the account’s percentage of its total equity in the master account. The lots within a trade are then divided between the accounts. Any residual lots will travel from highest to lowest equity sub-accounts.
Even: Even’s method distributes the trade evenly regardless of size. Residual lots will be allocated in order of the first account on the list working down.
Balance: The balance method distributes shares based on the sub-accounts percentage of the master account. Residual lots will be allocated working from accounts with the largest to smallest balance size.
Lot: This method only exists for the Cash allocation method. Lot allocation distributes the master trade lot size to the sub-accounts based on a configuration lot factor that the administrator sets.
Master account allocations have orders pushed from the master account down to the sub-accounts. Cash allocations have all the trades executed under the master account. Profits or losses are then distributed after the trade is closed.
Manual management of multiple accounts often comes with the hassles of allocating commissions. The Gold-i MAM allows users to pass on per trade commissions and/or spread costs incurred to the sub-accounts. Additionally, at the end of each month Scandinavian Capital Markets provides a detailed report on each investors performance, and handles performance and management fee payments. This allows a money manager to focus on trading their investor accounts, while Scandinavian Capital Markets handles the back office administration work.
While we’ve discussed many of the major configurations, there are several additional ones available as well:
- Number of allocation groups to be used
- Allow for sub account markups
- Full or allocation exclusion type toggle
- Auto-handle sub-client removal
- Daily reporting on master account open positions and account balances as well as for sub-accounts
Ability to close allocated sub account trades independently from the master account
The ability to close sub accounts independently from the master account has been a challenge for other MAMs on the market. This has caused issues when a money manager has investors who would like to leave the MAM while positions are open. As a result many brokers and money managers prevent investors from leaving the MAM while there are open positions, which has caused issues in the past. Gold-i has developed their MAM platform with these issues in mind, and through their seamless allocation methods they are able to flawlessly allow investors to leave a MAM at anytime.
Although many MAM tools exist, the Gold-i MAM provides an immediate benefit for all levels of traders and money managers. The ability to work with the MT4 platform makes it unique in its universal capabilities. Given the breadth of configuration options available, everyone from large funds to individual traders will benefit from the Gold-i MAM solution offered by Scandinavian Capital Markets.
Cover photo: Denisismagilov
September brings fresh starts – a new season, looking ahead into the future. It’s a chance to try new ideas and breath new life into your ventures.
Scandinavian Capital Markets has been busy launching new products, events, and corporate improvements to kick off the season the right way.Continue reading
Efficient. Reliable. Safe. These words describe the Swedish banking market, a financial and economic powerhouse that manages to balance honesty with profitability. Swedish banks are known for being trustworthy and steadfast, but how did they garner this reputation? Even more importantly, what does the security and reputability of the Swedish banking system mean for forex traders looking for alternatives to forex brokers based in Cyprus, Malta, St. Vincent, and beyond?
History 101: The Swedish Banking System
Sweden’s banking system has existed for centuries, growing stronger and more profitable with each new year. Sweden’s first bank, a private institution, was established by royal charter in 1656. Approximately 200 years later, the country’s first savings bank was founded. Currently, the Swedish banking system can be divided into four categories: commercial banks, foreign banks, savings banks, and co-operative banks.
A little over three decades ago – in 1986 – Sweden issued a charter for the first 12 foreign-owned commercial banks. Today, over 119 banks are operating in Sweden, including 29 foreign banks. Though Sweden is not part of the Eurozone, the country’s commercial banks offer euro-denominated accounts and payment services.
With close supervision by the Swedish Financial Supervisory Authority, Swedish banks are renowned as stable, trustworthy institutions – but that status was hard-won by the Swedish government almost 30 years ago.
Overcoming Obstacles: Lessons from a Housing Crisis
In the postwar era, Sweden was known as a prosperous welfare state, seemingly immune to the economic challenges facing most of Europe. In the boom period of the mid-1980s, Sweden’s financial system experienced large-scale deregulation, integrating Sweden with the world’s financial markets and triggering a boom-bust cycle for the Swedish economy. These actions created rapid debt growth, including the channeling of a large portion of the credit market into mortgages and property purchases. Housing prices began to rise, creating collateral for additional borrowing, and soon a bubble was born!
By 1992, Sweden faced a genuine financial crisis as the country’s housing market began its inevitable collapse. Similar to the dilemma faced by the U.S. in 2008, Sweden’s housing crisis threatened to take down the country’s entire financial system.
Faced with a hemorrhaging economy and a deflated housing market, the Swedish government stepped in to keep the country’s banks afloat. The government did this by bailing out the banks to the tune of about 65 billion kronor (approx. $18 billion US). But the bailout had strings attached: Each bank was required to write down its losses and issue warrants to the government. A bank support agency was also established while two banks, Nordbanken and Gotabanken, were taken over by the government.
A Model Business
The Swedish government’s actions were designed to keep the banks responsible for paying back the loans while also preserving the country’s financial system. The government did this by creating the Swedish Bank Resolution Model: A blanket guarantee of bank liabilities, maintaining political unity, providing open-ended funding, and requiring full disclosure of information by each bank of their current financial position.
In a sense, the Swedish government became a part-owner in the country’s banking system. As part of that role, the government initiated several actions to bring the banks back up to speed, including selling off distressed assets and using profits from those sales to recoup the cost of the bailout. In some cases, the government sold its shares in the bailout corporations as another way to fund the bailout. All of this was done with an eye on mitigating the damage to taxpayers while also strengthening the banking system so it could weather any future catastrophes.
Sweden’s tactics, when faced with the 1992 housing crisis, were incredibly successful. The country was able to keep the banking system itself running smoothly throughout the crisis, with a swift, streamlined process that managed to avoid bank runs, safeguard taxpayer money, and forestall involvement from outside organizations like the IMF.
In all, Sweden’s quick action bolstered its banking system’s international standing and built the foundation for Sweden’s continued prestige. Over the last decade, as established companies extended operations and new ventures were born, Swedish banks have leveraged their staying-power and high Tier 1 core capital ratios to increase their stature and competitiveness on the international stage.
Why Sweden and Forex Make Sense
Scandinavian banks are strong; with liquidity and solid investments backing up the industry. Known for being bastions of honesty and reliability, their reputation provides a framework for understanding why Sweden is the perfect environment for a new age of foreign currency exchange, one based upon a secure and stable banking infrastructure.
Sweden’s location is also a fundamental reason why forex traders taking a closer look at Stockholm. There’s no reason for traders to move their actions offshore to far-off countries when they can operate out of a closer locale. As the geographical center of Northern Europe, Sweden is not just the gateway to the Nordic nations, it’s a hub for the EU and UK, offering the ease of close-to-home trading without the onerous and impossible regulations currently stalling forex within the EU.
The New Power Duo: Scandinavian Capital Markets and Sweden
Armed with a vast knowledge of foreign exchange markets and deep roots in the Swedish banking system, Scandinavian Capital Markets can help you take advantage of all the benefits of doing business in Sweden. We don’t just deal with facts and figures; we provide context. We know what works and we stand recommendations and client support services because we can confidently rely on our first-hand knowledge.
Our team members have worked closely with Sweden’s largest banks, Nordea, Handelsbanken, Swedbank, and SEB. Our relationships with these long-standing, solid Scandinavian banking institutions means you have peace of mind because your funds are safe and secure.
For the last several years, we’ve had a front row seat to all the changes in the forex industry, and we’re ready to use our experience and wisdom to help our customers find success in the forex market. Whether you’re jumping into forex trading for the first time, or have years of experience under your belt, you deserve trading with confidence. Our clients can feel comfortable entrusting us with their funds because their money is always accessible; it can be withdrawn at any time. At Scandinavian Capital Markets, our commitment to transparency, honesty, and top-notch customer service mean you can trust us to lead you in the best, most profitable, direction.
Prime Minister Winston Churchill famously said, “If you’re going through hell, keep going.”
For many seasoned forex traders, the last few decades have felt like a long, hot, slog through purgatory; burned by untrustworthy brokerages and watching helplessly as profit slips through their fingers. Those who survived are, in many ways, the wounded warriors of forex: down, but not beaten. Weary and battle-worn, but not defeated.
Because, as General Custer advises all those who’ve met with defeat: It’s not how many times you get knocked down that count, it’s how many times you get back up.
From the Ruins, An Idea Emerges
In 2011, after establishing the Wealth Management Company, Arif Alexander felt the first tremors of change. Once he’d partnered with Michael Buchbinder, the two forged ahead to build a company based on the shared values of integrity and trust, putting client needs at the top of their list of priorities.
It wasn’t an easy decision. After working for years in the traditional forex industries, both Arif and Michael knew all the obstacles, boobytraps, and landmines they would have to traverse if they wanted to create a clear path to success for their clients. But they could not ignore the whispers that soon turned into cries for change: traders detailing all the ways they’d been cheated, mislead, and bilked. They were losing money – lots of money – and didn’t know whom they could trust.
They couldn’t track, or even define, the success or failure of their efforts. Even worse, they suspected there was nobody they could turn to.
Because of their own firsthand knowledge of the industry, Arif and Michael knew the forex playbook well. And that hard-fought wisdom – combined with brutal, boots-on-the-ground, experience – is what inspired them to build for a new type of forex brokerage.
This was a cathartic moment – a grand epiphany.
They wondered, “How can we rehabilitate the forex industry and help traders succeed?”
Delving deeper, they began to question the brokerage-trader relationship at its core. We all know forex is a heady, enticing game – full of quick deals and high hopes, and more than a little bit of chicanery. Arif and Michael wondered how, in this increasingly dishonest and insubstantial forex work, where traders are beholden to confusing fee schedules and fly-by-night companies that evaporate (deposits and all) overnight, they might reintroduce trust and integrity?
The Glories of Valhalla
In Norse mythology, Valhalla is a majestic hall located in Asgard and ruled over by the god Odin. Half of those who die in combat are chosen by Odin to travel to Valhalla upon death. These lucky soldiers, led by valkyries, join legendary Germanic heroes and kings in this shining, golden land. It is a respite for the battle-weary and a bright dawn for those who are tired of fighting and have earned the glories of a new day.
The modern Scandinavian business model builds on the idea of Valhalla because it lives on a framework of security and honesty. In Sweden’s new Valhalla, customers are returned to an unharmed state, safe and secure as their guardians man the gates. In Sweden, the sins of the past are gone, but not forgotten. Solid bulwarks have been erected, and businesses – specifically investments, finance, and banking – operate under strict rules and guidelines so that everyone is on an equal playing field.
Valhalla is the vast hall guarded by wolves. It’s the cornucopia overflowing with fruits and wine. It’s long feasting tables and five hundred doors, through which endless abundance flows, capable of satisfying any thirst.
A Forex Paradise
Scandinavian Capital Markets is building a forex Valhalla. The focus of Scandinavian Capital Market’s Valhalla experience is the person, not the profit. Other brokerages see traders as numbers on a spreadsheet’s profit center to be milked dry.
The Valhalla experience, on the other hand, is all about the human side. It starts with treating clients like partners. The entire Scandinavian Capital Markets team works as one to serve them better to help them achieve their goals. Valhalla was designed to help make traders win.
More than just icing on the cake, being located in Sweden allows Scandinavian Capital Markets to provide a high-end experience to clients. The cultural aspects of Stockholm – the food, the spas, the people – are unmatched anywhere in the world. Sweden offers respite and reinvigoration, just like those ancient visitors to Valhalla.
Scandinavian Capital Markets is committed to engaging with clients that want service and quality for sustainable business. Imagine flying business or first class to Stockholm, booking an appointment at a nurturing, Swedish spa, and ending your day with a meal at a high-end restaurant and full night of restful sleep. Imagine laying your head on the pillow and knowing your business day ahead finds you working with a team of committed partners, ready to listen and plan with you. Imagine you are once again made whole – you can trust, you can rise again.
Let’s talk about what makes a successful forex trader. At Scandinavian Capital Markets, we don’t rest on our laurels or make our clients wade through red tape or leave them at the mercy of complicated explanations about forex trading. Our experienced, nimble team of forex experts can cut through the layers of confusion and deception, deftly wielding their market knowledge and experience to clear the path ahead.
But before we get into all that, let me ask you a question.
If you could conjure the perfect forex trading environment, what would it look like?
This isn’t a fanciful thought experiment. Without an accurate idea of what you’re aiming for, it’s difficult to know where to start. So the first step involves understanding exactly what you need from your broker.
Every one of our client relationships is built on trust and accountability. We don’t promise what we can’t deliver, and you’ll find that everyone who’s worked with us will attest to our tenacity and honesty. Our commitment to teamwork and mutual respect filters down into every aspect of our business, from the top down. When the clients are happy, we’re happy, and that satisfaction is apparent in everything we do. There are no clouds on the horizon at Scandinavian Capital Markets because we don’t focus on profit; we focus on success.
But you don’t want platitudes; you want specifics. So here’s how we structure our forex trading services.
The Framework for Success
We excel at speed and simplicity. We don’t play around with long, drawn-out processes. We proceed smoothly and efficiently, with our eye always focused on the final prize: the successful trade.
We start by empowering our team members to focus on our customers. No matter the number of trades or years of experience, our top priority is helping our clients seize opportunity. With a clear goal in sight and plenty of communication and transparency, we strive to create a hospitable, honest, and reliable trading environment. Our goal is to develop long-standing relationships by demonstrating to our customers that we are the experienced and capable professionals they can trust to lead them through the forex forest.
We’re always willing to dive into the details. We look closely at patterns and stay up-to-date on trading standards. We study demographics to see how a region’s currency is evolving and what the next great move might be. Moreover, because we’re always looking towards the future, visualizing what success in forex might look like over the next five or ten years, we can mitigate surprises and help our clients plan for long-term success.
Hitting Roadblocks, Clearing Obstacles
Account set up is straightforward, and our customers can get trading quickly, but not blindly. We can help our clients act fast because we’re small enough to adapt and knowledgeable enough to anticipate what lies ahead.
When our traders hit a snag, we’re here to help. We won’t shy away from assessing problems and proposing solutions. We let our clients know if strategies should be altered or expectations need to be adjusted. We’ll help discover the unconventional solution and work hard to find a method that allows everybody to get what they need.
We are committed to the success of our clients, and our familiarity with forex markets enables us to develop the right strategy for the desired outcome. Other brokers may make a lot of money letting traders proceed blindly (or even through deception), but they end up burning clients and bring shame to the industry. For us, it’s not about making more money; it’s about seeing our clients prosper.
Float Like a Butterfly, Sting Like a Bee
Scandinavian Capital Markets is not the elephant in the room. Our team runs on efficiency, and we cut out unnecessary processes to get you from point A to point B and all the way to Z as quickly as possible. We have the freedom to help our clients act on opportunity, and you can feel confident in our ability to change course when needed and adapt to the changing market landscape so that you are best positioned to capitalize on all the opportunities available.
We will lead you every step of the way, from the very first spark of an idea all the way through to your first trade. By keeping an eye out for developing opportunities, we’re ready to make a move when we get the call or see the chance.
It’s a common refrain at Scandinavian Capital Markets, people matter, not profit. Sure, it sounds like a glib, market-ready tagline, but it’s our rallying cry. At Scandinavian Capital Markets, we treat every client as a partner and every team member as an invaluable asset. We listen. We care. Our Valhalla experience adds a personal touch and provides a bespoke service to clients and building rapport and the basis for a long lasting relationship.
We value our clients, and we work hard to make sure there’s an open dialogue between our founders, our staff, and our customers. No surprises. No unanswered calls or non-committal responses. When you are part of the Scandinavian Capital Markets team, as a client or an employee, you are valuable. It’s the people that make this whole endeavor worth it, and it’s our clients and staff who are helping to write the Scandinavian Capital Markets story.
Dear reader, you are about to embark on a journey. It starts with the dark beginnings of the modern forex industry and leads you to a city of light: Stockholm. You will hear about the questionable practices of the dealing desk brokers. You’ll learn about the Nordic philosophy of fairness and balance. And you’ll start to understand why Sweden represents a Valhalla for forex traders.
Introduction: A New World for Forex
The forex world is changing. New regulations are making it difficult — if not impossible — to operate in traditional locations like London and the EU. Meanwhile, the shady practices of places like Cyprus, Malta and offshore have led investors to seek out new opportunities overseas in countries like Australia and Singapore.
What if you could keep all the convenience of staying local while avoiding the more arduous aspects of EMSA, MiFID II, and BREXIT?
Consider Sweden. The best-kept secret in the forex industry is finally ready for prime time. But to truly understand why Sweden makes sense, you must first understand the past, present, and future of forex trading.
A Dark History
Can I make a living trading forex? Can forex trading make you rich? Who is the wealthiest forex trader in the world? These are just some of the questions that dominate any forum devoted to educating new traders in forex. While forex presents a lot of opportunities to make money and even become extremely wealthy, without proper guidance and trustworthy brokers, many newbies crash and burn — and, unfortunately, many unscrupulous industry participants profit from those traders’ losses. As a result, forex is seen by many as a treacherous and risky endeavor, while others see the risk as a challenge, and end up paying dearly for their hubris.
Lawlessness and Losses
It’s been called the Wild West of trading: ridiculously high leverage, little enforcement, and even fewer requirements on who could call themselves a money manager. Obviously, forex trading is not new. In fact, the roots of today’s currency trading and exchange extend as far back as the ancient civilizations of Greece, Egypt, and Mesopotamia. The Medici’s ran trading during the 15th century, eventually giving way to England: in 1913, almost half of the foreign exchange occurring globally used the pound sterling.
Thanks to modern technology, today’s forex market can take place in many different channels all over the globe, wherever one currency is exchanged for another. The truth is, new electronic platforms combined with almost unfettered leverage has transformed forex into an alluring activity. With heavy marketing pushing the idea of easy money and a steady income, a cottage industry exists pushing new training courses, strategies, and tools, all guaranteeing success.
Unfortunately, those claims rely almost entirely on smoke and mirrors. Statistics paint a grim picture: 95% of all new Forex traders lose their entire invested capital within 3 to 4 months, and only around 1% of traders make any significant profit from their forex endeavors.
Shady Practices and Sacrificial Lambs
While technology lowered trading costs, it opened the door to unsavory practices and exploitation on a larger scale. Survivors of dealing desk brokers already know firsthand what it’s like to get lost in a maze of shady deals, including clients pitted against each other or brokers setting up the trade to benefit the house.
More akin to bookmakers, these dealing desk brokers bet against their own clients, knowing that because 95% of retail traders fail, their wager is a sure thing. Even worse, the house is often stacked against the trader, with brokers tilting the game in their favor by inserting “cost of carry” charges and momentarily widening their bid-to-offer spreads to hit stop losses and force a loss on the client.
Because of these and other similar tactics, the retail forex world became a bloodbath for new and inexperienced traders who – like innocent lambs led to the slaughter – sacrificed their livelihoods (and sometimes their lives) for the unattainable dream of becoming an overnight millionaire.
Setting the Stage for Huge Losses and Greater Regulation
In retrospect, the 2008 financial crisis appears almost preordained. So much speculation, so little regulation. It was only a matter of time before a confluence of events coalesced into a catastrophic series of events.
As black swan events go, 2008 sits alongside such other notable calamities as the 1997 Asian financial crises, the Dotcom crash, 9/11, BREXIT, and the SNB crisis of 2015. The SNB crisis – when the Swiss National Bank suddenly announced it was abandoning its currency’s peg to the Euro – could be flagged as the precipitating factor for the most recent slate of regulations imposed on the banking, finance and investment industries. The SNB event was also the driving factor of ASIC no longer allowing brokers to use client deposits for margin at their liquidity providers.
When combined with the 2008 financial crisis and continuing unrest and unpredictability in many foreign markets, the SNB crisis sent out a flare to the European Union, demanding attention and setting the stage for more robust and purposeful regulation of the forex industry.
Jumping Ship and the New Regulatory Reality
Changes are in the air. ESMA and MiFID II (along with BREXIT) are changing the forex landscape and making traditional locations, like London, inhospitable to forex trading. Additionally, traders are fleeing these traditional centers like London, Cyprus, and Malta and relocating to Australia and Singapore. After the passage of Dodd-Frank in the US, many forex firms relocated abroad in order to avoid stringent regulations, but now the EU is no longer a safe haven.
The tides shifted initially with the implementation of the “Markets in Financial Instruments Directive” (MiFID II) in the EU in January of 2018. MiFID II requires forex brokers to store all transactions for a minimum of five years, and traders using algorithmic trading must register as an asset management firm and submit their algorithms for review.
In March 2018, the European Securities and Markets Authority (ESMA) introduced another set of regulations that impose limits on leverage for various assets (30:1 is the top tier), banned binary options and bonuses, required transparency and negative balance protection measures from brokers, and much more. The result is that traders benefit from greater protection but lose agility and flexibility. For brokers and money managers, the new regulations make it difficult to operate within the EU without a professional status classification, which can be difficult to obtain.
The Offshore Option
For many brokerage firms and forex traders, these EU regulations signaled a sea change, and the addition of BREXIT only muddies the waters. Many began departing to Australia and New Zealand, where leverage ranges are wider, but the forex industry is still well-regulated. Others chose classic offshore havens.
Unfortunately, while these offshore locations provide a haven from EU regulations, they are not without their deficiencies. For example, some traders encounter difficulties transferring funds between EU banks and offshore companies. In addition, many offshore brokerages in places like Belize, the Cayman Island, Vanuatu and Seychelles are scam companies set up to bilk investors with little to no repercussions. After all, the same lax regulation that proved alluring will also apply when an offshore broker disappears with a trader’s funds.
The question is: Can forex emerge from the shadows into something brighter, more positive, and scaled to provide opportunities for every trader and money manager?
At Scandinavian Capital Markets (SCM), we think that forex can emerge from the darkness and we believe Sweden is the spot where this will take place.
According to Finnish journalist Anu Partanen, “When the World Bank ranks countries on ease of doing business, based on criteria such as starting a company, dealing with construction permits, getting credit, trading across borders, enforcing contracts, or paying taxes, the Nordic countries consistently rank among the most business-friendly nations in the world.”
Stability and Security
The Scandinavian reputation provides a framework for understanding why Sweden is the perfect environment for a new age of foreign currency exchange. Known for being bastions of honesty and reliability, the secure and stable banking infrastructure in Sweden provides a foundation of political and economic stability ideal for the modern forex trader. The banks are strong; with liquidity and solid investments backing up the banking industry. The core Tier 1 capital ratio of Swedish banks is currently 24 percent, almost double the EU average of 13 percent.
In addition, in Stockholm, the economy continues to grow at a rate faster than the rest of Europe. For example, investments in tech companies in Stockholm nearly tripled between 2015 and 2016 and continued at a feverish pace well into last year. In addition, revered, trusted, and well-liked companies like Volvo, Ikea, H&M and Ericsson also call Sweden home.
A Culture of Fairness
Dutch social psychologist Geert Hofstede describes Nordic society as horizontal, with a “low power distance” between the wealthiest and most humble Scandinavian citizens.
In Swedish culture, this horizontal mentality manifests itself in the country’s business culture, which is less hierarchical and more relaxed than many western countries. In addition, the Swedish people prefer making decisions through consensus and place a high value on egalitarianism and fairness in all aspects of their personal and professional lives. The Swedes also place a premium on balance rather than excess, as expressed in the old Swedish proverb, “Lagom är bäst,” which means, “The right amount is best.”
Location, Location, Location
There’s no reason for traders to move their actions offshore to far-off countries when they can operate out of a closer locale that also happens to be more reliable and honest. Located in the geographical center of Northern Europe, Sweden is not just the gateway to the Nordic nations, it’s a hub of operations from all parts of the EU and UK. Swedish companies export their goods and services across the globe, giving them an understanding of different cultures. In addition, the Stockholm business world is fluent in English – making it simple for companies from all over the world to thrive within its borders.
Conclusion: The Lagom Mentality
In Sweden, you don’t try to “have it all.” Instead, you focus on having enough. It’s the Lagom mentality, and it influences almost all aspects of Swedish life, including business. For Swedes, greed is nonsensical, and balance and fairness are valued more than money or material goods. At first glance, it may be difficult to reconcile the image of cutthroat forex dealing desks with an egalitarian and even-handed mindset, but not if you find truth in that old saying, “a rising tide lifts all boats.” For years, the forex industry was dominated by avarice and excess. It was a place where a few controlled – and deceived – the many. In places like Cyprus and Malta, local brokers conspired to steal billions from traders in the dealing room.
But there can be a better way. The Dealing Room in Limassol populated by self-serving dealers is a thing of the past in retail forex. It’s no longer du jour to be a clever dealer or a crafty brokerage owner in forex. Now the leading forex brokerages are solely focused on helping traders win.
The forex organizations of the future invest in excellent education, service, and technology. Gone are the days of knowingly stealing from clients. It’s over completely. Now retail forex participates in assisting traders to manage risk properly, learn when (and when not) to trade, and instantly enter/exit trades on next-generation platforms. At Scandinavian Capital Markets (SCM), our leadership has seen it all, and we know exactly how to help brokers, money managers, and traders feel comfortable and safe.
A new era is dawning, one that is brighter, fairer, and full of opportunity for all. At SCM, we believe the new age of forex is on the horizon, and it all begins in Stockholm. Think of Sweden as the Valhalla of forex, a transformation from the hell of the past to a heaven of prosperity and security. In Valhalla, those who were slain in battle found everlasting life and endless sustenance. Such is the legacy of Sweden for its own citizens and such will be the experience of SCM clientele.
At SCM, we are proud of our Swedish roots, and we adhere to the Lagom mentality and our nation’s historical emphasis on fair-dealing and stability to provide a revolutionary forex service that combines the benefits of innovative technology with superior customer service. The result: an honest brokerage well-positioned to use the latest technologies to help new traders, IBs and experienced money managers not just succeed, but thrive.
Let’s talk about the value of focused, personalized customer service. I’m Arif Alexander, Founder and CEO of Scandinavian Capital Markets, and when I look at the current state of the Forex and currency markets, I feel optimistic. That’s because I believe all market climates offer options for growth and success. Even in times of volatility and uncertainty, there are advantageous trading opportunities; as long as you know where to look.But before you can begin your journey, you need a solid roadmap and an experienced, trusted guide. Just as the sunstone guided Viking ships safely through treacherous waters during medieval times, Scandinavian Capital Markets is here to be your trusted guide in the Forex market.
People over Profit
When it comes to exploring the investment opportunities of the foreign exchange market, I know what it’s like to feel overwhelmed and mislead. It’s frustrating when the very people you turn to for guidance only see you as another resource to exploit. I think there’s a better way to do business: by focusing on people rather than profit.
It’s all about trust and transparency.
When it comes to operating on a global scale, integrity and reliability are the cornerstones of every partnership. Every transaction carries risk, so it’s essential you develop relationships built on transparency and experience. You need someone at your side who understands the big picture but is also well-versed in the intricacies of your individual situation.
Scandinavian Capital Markets operates on three basic principles: transparency, fairness, and generous profit share.
Our team includes an international staff well-versed in currency trading, financial markets, institutional trading and risk management strategies. Our experts have worked with some of the world’s largest Tier-1 investment banks, including Lloyds TSB London, Barclays, Citigroup, and GE Capital Bank. We’re an independently-run operation located in Stockholm, Sweden – in the heart of the Scandinavia, a place where you can rely on stability yet find freedom from the strictures of ESMA. We’re not a monolithic financial institution, and we don’t participate in monopolies or try to game the system. With a world-class team of management and analysis professionals and a proven track record, we pride ourselves on our commitment to customer service and building mutually beneficial partnerships with our clients.
Our success comes not just from what we know but from our ability to forge long-standing relationships and comprehensive, customized solutions. Consistency breeds loyalty and our roster of successful clients are a testament to our ability to not just hit the mark but exceed expectations both in portfolio growth and customer service.
A New Type of Brokerage: Combining Innovation and Superior Client Services
We stand apart from traditional forex brokerage houses by the way we use technology to provide our clients with a proven high-performance foreign exchange platform along with world-class customer service and support. It all starts with Scandex, our intelligent exchange trading platform that uses agile programming methodologies, automated trade reconciliation, smart trade match routing to mitigate risk to create a high-performance foreign exchange platform. With Scandex, money managers get access to a proven, high-performance foreign exchange platform that takes the industry standard Trade Copier & PAMM / IB Suites and adapts them to better meet end-user and market needs.
Our MAM (Multi Account Manager) feature provides a flexible system that allows sub-allocated trades under the master account so money managers can execute block orders quickly for their investors, while still taking advantage of the flexibility of being able to modify their account size, amount of lots, and make adjustments based on the risk profile of their investors. If you are a money manager responsible for multiple accounts, the MetaTrader 4 add-on allows you to conduct trades from a single MetaTrader 4 client, and with centralized processing, you can ensure no delay between each trade with one-click trade execution. The combination of Multi Account Management and the Scandex platform allows us to tap into the power of the latest intelligent exchange technologies to provide our clients with a full-featured back-office to manage risk, trade activities, positions, and settlements.
It’s About Trust and Transparency
When I helped found Scandinavian Capital Markets, I decided to create a business that operated differently from a typical FX broker. In my experience, communication is an essential aspect of any good business relationship, and so I built this company upon a foundation of honesty and responsiveness. Our clients will be able to speak to a live person upon request, and instead of dismissing or ignoring customer issues, we will work with our traders to turn every complication into an opportunity by finding out what went wrong and then working together to find the right solution. We understand complaints are most often the result of a misunderstanding, and our team will work with you to make sure all your concerns are addressed quickly and effectively.
On the Road to Success
Our market philosophy is based on the perception that all market climates offer the options of growth and success. We understand your challenges, fears, and concerns, and we are ready to work with you to find the right investment solution to help you not just succeed, but thrive. At Scandinavian Capital Markets, we go the extra mile to help our clients. The foreign exchange market is a vast landscape full of promise, and a successful journey doesn’t mean you have to forgo people for profit. We will guide you every step of the way, from opening up your account to making your first forex trade. Our people make us great, and our clients are our most valued resource.