Why are these important?
- Run a B-book or make money from client losses
Signal Provider believes that to do the above would be detrimental to best execution efforts, unethical, and a conflict of interest between a traders bottom line and the brokers.
If a broker wants to operate on these grounds, then it should be disclosed.
- Receive any form of profit share from a group entity relating to our clients trading losses, i.e. no other company runs a B-book on our behalf.
OR
- Have arrangements with trading counterparties to run a B-book on our behalf.
An ECN/STP/NDD broker should not have relationships that seek to benefit from trading losses, either directly or indirectly through some third party relationship.
Brokers that wish to have such relationships should disclose it and not hide behind opaque language and ambiguous terms to disguise what's really happening behind the scenes.
- Our trading is fully automated, i.e. ‘No Deal Desk’. We have no human discretionary traders and we do not make hedge execution decisions based on client trading behaviour or account profitability.
- Client trading behaviour and account profitability should not be a factor in deriving a broker’s hedging strategy.
- Make proprietary trades or hold proprietary risk positions.
Proprietary trading creates a conflict of interest that a broker may have when acting as principal versus its clients.
This may include, but is not limited to, the misuse of client orders, positions and other information, along with the increase in the amount of risk on the balance sheet that could result in a lack of security of client funds if the broker were to fail.
*Non-bank market makers spread earnings on Indices and Energies CFDs
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Indices and Energy CFD products are ‘synthetic index tracking derivatives’. They follow the underlying cash and futures markets of their respective index.
- We do not provide an aggregated or ECN feed for these products since most liquidity providers will have somewhat different prices and there is no central counterparty or ‘prime broker’ through which these trades can be given up and cleared. Because of this all trades generally go to a single liquidity provider.
- These non-banks do not run a B-book for Signal Provider or make hedge execution decisions based on our clients trading behaviour or profitability.
- Signal Provider is paid a percentage of net earnings from spread after hedging costs from the trades that we execute through them.
- Signal Provider has measures in place (covered on the best execution page) to ensure the prices we receive from our non-banks on our Index CFD products are consistent with other providers and that our spreads are the best in the market.
