Exclusive: Raj Sitlani on IS Prime’s growth as a liquidity provider
FNG Exclusive Interview… Alongside the amazing growth of overall trading volumes and activity at Retail FX and CFD brokers in the past two years, has been a parallel rise in prominence of a number of liquidity providers to brokers and professional traders, with IS Prime at the center of it all.
We are pleased to speak today with Raj Sitlani, Managing Director of ISAM Capital Markets, who talks to FNG about IS Prime’s growth as a liquidity provider to Retail FX brokers and the firm’s ambitions for further expansion in 2022.
FNG: Hi Raj, and thanks so much for joining us today. IS Prime is one of the most established and respected Prime of Primes. How has business been over the last year and how has your offering evolved?
Raj: This has been a very strong financial year – not only for IS Prime but for the ISAM Capital Markets Group, which also includes IS Prime Hong Kong and IS Risk Analytics. We emerged from the pandemic in a strong position and business is continuing to grow across all regions.
We have evolved in terms of growing our team and investing in technology as opposed to adding a vast array of new product areas which are likely to be loss leaders. We are firm believers in ‘sticking to your knitting’. As a Group, we are specialists in FX, indices and commodities – and clients come to us because we excel in these areas.
FNG: How has IS Prime been able to differentiate itself from competitors in an increasingly crowded market?
Raj: First and foremost, we are a liquidity originator rather than a liquidity reseller, and as such, we have full flexibility with how we formulate pricing for a particular client. This means that we are able to out compete all our peers for the right client opportunity. We are particularly strong at servicing larger clients as a result, as demonstrated by our track record and client retention.
We also stand out from competitors as the only Prime of Prime which is part owned by a systematic hedge fund manager. This is hugely advantageous. Being part of an institution of the size and calibre of ISAM means that the corporate governance, the processes and the infrastructure across the ISAM Capital Markets Group are far more robust than our competitors. We have structured our business, in the optimum way to provide clients with a multi-faceted offering. Clients can contract with whichever entity is more appropriate for their needs – and they have the reassurance that we provide operational excellence across the Group and adhere to all relevant regulatory requirements.
Our technology-centric approach is also a differentiator. Being part of a systematic hedge fund manager means that everything is automated and the quality of our technology is second to none. We invest a significant amount of money each year in developing the very best in-house proprietary technology in order to outperform our competition. Whilst we benefit from the technology available through ISAM, we also have a dedicated IS Prime software development team and can tailor our solutions to specific client requirements.
Additionally, the longstanding relationships that we have with the street-side providers also helps us to stand out. These relationships are key to the quality and competitiveness of our liquidity offering.
Other differentiators include the quality of our people, which is another stand-out factor for IS Prime. We have attracted the best people across all business functions and this means that we are able to offer an outstanding service to clients. As you would expect, given that we are part of such a credible and well organised institution, we have a culture of genuine accountability and everyone has clearly defined roles and responsibilities.
The breadth of services we offer to clients gives us another competitive advantage, particularly having IS Risk Analytics (ISRA) within our group – a separate value add, risk advisory and technology business. In addition, our Agency business is an additional string to our bow and is an important cornerstone for us to have within a predominantly FX brokerage business.
FNG: Do firms have to be IS Prime clients in order to benefit from ISRA Services?
Raj: Not at all. ISRA is within the ISAM Capital Markets Group and our clients can pick and choose whichever part of our offering is most relevant to their ability to run their businesses. Whilst many clients choose to opt for Liquidity through IS Prime and risk services and/or technology through ISRA, there is certainly no obligation to do so.
ISRA has a number of clients who do not require liquidity services but who use ISRA’s consultancy and risk advisory services as a valuable second pair of eyes and an independent validation of the way they are managing their risk. This is charged as a monthly standard fee and is not variable or volume related. ISRA currently oversees over $1.8 Trillion in monthly notional risk volumes. Their holistic view of the market enables them to spot trends which individual brokerages, no matter how large, are unable to see. Ultimately, ISRA plays a major role in helping clients to take a more informed approach to risk, to adapt their business models accordingly and monetise their flow on a more consistent basis.
FNG: Are you able to comment on IS Prime’s law suit against ThinkMarkets?
Raj: We have tried to keep a dignified silence about the case. However, in light of some statements in the media which have not been an accurate representation of the latest court ruling, I am keen to set the record straight. The last ruling resulted in a strong and significant result for IS Prime, with IS Prime winning on four out of the five issues in the application. Think’s counterclaim which remains is now in reduced form and has been heavily criticised by the Court as “suffer[ing] from a lack of detail, obscurity and potential inconsistency.” These comments are entirely consistent with IS Prime’s view.
FNG: What’s the focus for IS Prime moving forwards?
Raj: We will continue our focus on the retail broker market as this has been our traditional anchor for our business and we remain very loyal to the clients we serve in this space. We have a large market share and aim to gain even more clients across all key territories.
Given our dominance as a liquidity provider to the retail brokerage sector and our ambitious growth plans, we are building out our capabilities to other segments of the FX market such as hedge funds and money managers. These institutional clients, just like our Agency clients, require a more sophisticated product set. We are already gaining clients in these segments and we see significant growth opportunities ahead.