State your name, company name and position please:
Michael Overlander, Sucden Financial, CEO
Describe your company with three words:
Forex/Derivatives Broker
Please go into detail about the Company, its market segment and recent developments:
Sucden Financial is a leading international broker operating in a broad range of markets, including exchange and OTC traded financial and commodity futures and options, equities, foreign exchange and bullion.
Formed in 1973, the firm started life as the London brokerage arm of our parent, Sucres & Denrées (Sucden Group), which is one of the world’s largest physical traders of sugar and other commodities and has over 5000 employees in over 30 locations worldwide.
The company has evolved into one of the largest brokers for traders, fabricators, producers, consumers, investment houses, hedge funds, commodity firms, retail brokers and high net worth individuals.
Sucden Financial is a long standing Ring Dealing/Category 1 member of the London Metal Exchange (LME) and is a member of many other major global exchanges, as well as the London Bullion Market Association (LBMA). The company’s background in FX is well established, with a dedicated currency desk formed over 20 years ago. Our long standing association with multiple FX liquidity providers and our existing infrastructure has helped enable us to offer our tight spreads and deep liquidity.
We have added non-FX products to our retail broker offering, in response to client demand. On top of FX and bullion, we offer index and commodity CFDs and futures, which we believe is a unique offering for retail brokers.
Our fully owned subsidiary in Asia, Sucden Financial (HK) has been in place since 2008 and was recently granted a Type 3 (leveraged foreign exchange) licence by the Securities and Futures Commissions (SFC) in Hong Kong, enabling clients to trade FX directly via its brokerage desk or via electronic trading systems.
Why should retail brokers choose your company instead of others?
Sucden Financial has a 40 year history in the financial markets and offers a highly reliable electronic offering for retail brokers seeking access to 100% STP FX and bullion liquidity. CFDs and futures can also be streamed via an API and clients benefit from tailor-made solutions utilising the latest cutting-edge technology. We have tight spreads and deep pools of liquidity and believe we have the best EUR/USD price feed on the market. We employ almost 200 people in London alone and apply these resources to offer our clients an exemplary service, with client support teams available by telephone 24 hours a day.
Our aim is to be the leading institutional provider in the retail FX industry. Winning the Forex Magnates Award 2013 for Best Prime of Prime Solution was a real testament to our success in this highly competitive market, highlighting that our reputation for excellence is spreading across the industry.
Please elaborate on your industry experience, and what you have achieved since being appointed CEO.
I have been involved in financial services for a few years! My career began on the London Metal Exchange (LME) in 1971 and I have worked for the Sucden Group since 1973.
In 1984 I was appointed to the board of Sucden Financial and I have been responsible for helping the company expand its activities from being a single commodity house to a fully comprehensive brokerage company with its extensive international client base and full electronic offering.
What are your present issues and challenges and what is your plan to steer the company through them successfully?
Increasing regulatory requirements have dominated in recent years - most recently EMIR. Given the background of the company, we have the infrastructure, expertise and necessary resources in place to cope with most changes relatively easily. In the first week after the new reporting requirements took effect, the firm reported almost a million transactions – at a time when the markets were quiet.
One other challenge for the FX industry as a whole is any possible migration from the current OTC market structure to a more exchange led market. Given our background and expertise in listed business, we would consider ourselves to be very well positioned should this market change come about.
As the industry is well known to be highly competitive, what means do you use to survive and to excel in such a fast and sometimes harsh environment (except for collaboration with Forex Magnates Directory of course ;)?
We have looked to build the FX business at Sucden Financial using the same business principles that have allowed us to be successful in the financial markets for over 40 years. Many of the participants in our area of the FX market have grown out of retail brokers, whereas we have come from an institutional background.
Whilst FX is a now major growth area for Sucden Financial, we have been a major international futures broker for many years. The main aspect that we have taken into our e-FX business is the principle of agency business (or “STP” in retail FX market terms). We do not run any risk against our clients, and we have found that our clients appreciate this transparency.
The other manifestation of our institutional background is service. Many of our competitors service retail and institutional clients in exactly the same way, whereas our FX service is specifically tailored for Institutional clients. We understand the needs of our clients and service them accordingly.
Background , history
The company has been in existence for over 40 years and our parent company was established over 60 years ago. We have adapted to the ever changing environment – listening to clients and keeping up with and often ahead of industry trends is key. The company is fully geared-up for electronic trading, with multiple solutions for a wide spectrum of clients.
Does your company focus on the domestic market or does it have a global presence?
Sucden Financial is based in the heart of the City of London and has offices in Moscow and a subsidiary in Hong Kong (Sucden Financial (HK) Limited), which was recently granted a licence from the SFC to market its FX business.
Historically the company has been fairly Europe centric, but over the last 15 years, Asia in particular has become a very significant part of the business and the firm’s client base is now truly diverse and international.
What is your company’s plan for the next two years? Please detail any expansions, technological developments, mergers/acquisitions or proposed entries into new markets.
There is a large focus in the market on trying to offer more product types to an increasingly demanding client base, and Sucden Financial is currently working on a solution to fulfil this exact demand. We try to be nimble in response to client demand, which is why we are looking to launch a multi-product STP white label later this year
We have a number of technology projects in place which will enable us to lower execution costs for our LPs and improve our aggregation. This will mean that we will be able to improve on our spreads, which we already believe to be among the best in the industry.
Is branding important, and what is your corporate view on it?
With a 40 year heritage, the Sucden Financial brand is internationally recognised in the commodities world and in recent years has built up substantial recognition in FX, specifically for our STP liquidity offering.
What are your predictions for the coming years of the Forex industry as a whole?
One thing that we have seen in this particular business is that innovation is more or less constant. There is a steady stream of new businesses that appear with very innovative ideas. Most of these however tend to be more focused at the retail end of the market and it has been a while since there have been any ‘game changer ‘products.
From Sucden Financial’s perspective, I consider the FX business that we conduct to be very simple, we aim to give very tight pricing and very good service to all of our clients. In my experience this has been the formula for a successful broker for many years, and I would anticipate that this will still be the case for years to come.
Our clients are very happy with our service, as our growth would testify. This would suggest to me that the formula that we currently have is working well!
Do you think that the forex industry is transparent enough and that most companies including yours pay enough attention to due diligence?
It is undoubtedly true that the retail end of the FX industry has suffered (and still does to some extent) from the lack of execution transparency from certain participants. We have always been strong advocates of our STP ECN model, because we believe that this affords the best level of pricing, execution and transparency for our clients, and also enables healthy competition in the market as a whole.
Regarding Due Diligence and KYC (Know Your Customer), the FCA has a “risk based” approach to KYC principles and as such it is up to each individual firm to decide on the level of risk that they want to take. I believe that we are at the more risk averse end of this spectrum within the FX Industry. This can mean losing out on some short term gains at times, but the approach has kept us in business for over 40 years.
To allow us to get to know you a bit better, let us know something that interests you, and what you enjoy doing in your spare time.
What spare time! With four young and enthusiastic grandchildren my wife and I have abandoned tennis and golf for swings and roundabouts. What more could anyone wish for?
Forex Magnates Directory would like to thank you for an excellent interview and for giving us a great insight into both your product and business and also for sharing some of your personal interests.
Thank you,
Bjorn Enqvist
Head of Directory
Forex Magnates