Alpari.co.uk Discussion

Good brokers are precautionary. For example, by the maximum open trades is limited. Or in some risky currency pairs, the leverage is changed. For example, Dukascopy has already warned in October that in the near future with the fall of 1.20 could be expected. According Dukaskopy reduced the leverage for CHF currency pairs as a precaution. Some other brokers were doing the same. Furthermore, Alpari had had as market makers the possibility to hedge positions. The management at Alpari a lousy job done.

For me brokers who are increasing margins on CHF pairs after SNB are quite funny, their risk managers decided to take action post factum, which is totally unreasonable. I understand if broker rises margin for other pegged currencies like USDHKD, EURDKK or for all currency pairs, but increasing only CHF pairs doesn't make sense to me.

that was an example, if you are referring to my post.

​Alpari management and risk managemement is undoubtely failed big time. That is why they lost their jobs. Unfortunately no regulation can protect from stupidity. FCA does not monitor risk of brokers. Americans have strickter rules, but still FXCM managed to do even worse than Alpari. That is why you as a trader have to do your work on researching brokers. When I was doing it, initially I was pissed off by brokers who said they monitor client's activity, restrict too abusive use of leverage by clients and do credit checks and so on. I was thinking who the hell they think they were telling me how I can or cannot trade with my own money. But then I had a long chat with a manager of one broker and he told me that rekless trading can damage not only the person, but also make losses to other traders and broker too. So, my advice do your homework, ask a prospective broker as many questions as you can imagine.

Who do you trade with at the moment if you don't mind me asking?

Still on the hunt for a new broker, it's a real pain in the ass trying to find a good one.

I was lead to believe that the alpariUk was an ECN not a market maker. They did not trade against their clients. Am I missing something?

yes it wasn t a market maker

Alpari offered its customers an ECN account. If you want to search the Internet cache, then you realize that a market maker Alpari was. also a market maker may offer an ECN account. And that there was a market maker could be seen easily. In times of high frequency trading was often the server for seconds or even minutes unreachable. a true ECN will never be disconnected from the server. please go of google: search:"alpari market maker"......and then you realize that I recognize it right. I wonder now how stupid people can be. Nobody except me informed? I was aware that a market maker Alpari was in the first place. Despite ECN account. And therefore it is difficult to understand why risk management failed at Alpari uk.

I had a MM account elsewhere and I know how it looks like. My account on AlpariUK was definitely STP as I could scalp during big news without any problem. There were also ECN accounts but I didn't have one.

I sent my proof of debt form off to KPMG, yes its looks like its going to be along haul.
This was my second action, my first was to ask my accountant to offset this as a tax loss, this year.

on the plus side there is an opportunity here, KPMG's reply said I qoute:

"It is estimated that it will take several weeks for the Joint Special Administrators to design, develop, test and implement the Claims Portal. Further updates regarding the development of the Claims Portal and actions required to be performed by clients will be provided in due course."

This means that KPMG don't have an off the shelf "portal template" designed and ready to deploy at a moments notice!
To send out 100,000 encrypted keys one to each client and get them to log on to stake their claim, log the results in a small database.

Anyone fancy helping me write one? or do you just think this is smokescreen?

already somoene posted

Pepperstone has $14 million missing from its client trust accounts, im sure they will be next to collapse.

See below

Taking Pepperstone with a grain of salt

THE AUSTRALIAN JANUARY 31, 2015 12:00AM

Foreign exchange trading has always had the thrill factor. Source: AFP

FOREIGN exchange trading has always had the thrill factor. Large amounts of money are won and lost in the blink of an eye, as the Swiss currency debacle graphically illustrated earlier this month.

Yet despite the risks, foreign exchange trading ranks as one of the fast-growing activities among private investors. The desire to make a quick buck, increasingly by trading online, has sparked a drastic rise in the number of retail currency brokers.

In Australia, no firm has ridden the wave better than Pepperstone. Its two founders, Owen Kerr and Joe Davenport — both in their early 30s— have become poster boys of the sector, scooping a rash of industry awards after jumping, seemingly from nowhere, to a position of global prominence.

According to an industry news and resources firm, Forex Magnates, Pepperstone ranks as the world’s 12th-largest retail foreign exchange broker.

The firm’s heady climb was mirrored by the ballooning fortunes of its founders. Last year, Kerr, now a regular presence in the country’s business media, shot on to the BRW Rich 200 list with his wealth estimated at $250 million.

Talk of an imminent initial public offering, valuing the firm at $600m, seemed to be the icing on the cake.

Pepperstone , according to Kerr and a number of bankers, could be the next OzForex, the foreign exchange payments company that enjoyed a buoyant spell in its first year before a recent decision by Westpac to withdraw its services from the sector sent the stock into slump.

The two businesses are in fact very different, but Pepperstone’s seemingly unstoppable success had captivated and charmed the media.

It helped that Kerr, an affable and accessible person, was always happy to explain the reason behind the company’s incredible achievements.

While the details vary slightly from one interview to another, the basic explanation was that Pepperstone had invented a product that does something faster, better and cheaper than the incumbents. Simple.

As one former colleague stated: “Owen is an incredibly good salesman. They are exceptionally clever at marketing.”

Yet once Kerr’s public remarks are subjected to deeper scrutiny, a slightly less consistent picture emerges. Many of their rivals complain that the media has provided Pepperstone with an easy run or simply don’t understand the business.

Take, for instance, the reference made in an interview published by the Financial Review in aftermath of the Swiss currency bombshell. Kerr said the firm had avoided the calamity – which ranks as one of the greatest shocks to the currency system since the collapse of the Bretton Woods system in 1971 – due to a combination of foresight, conservatism and high-speed trading technology.

He claimed Pepperstone liquidated clients positions “one quarter of a second after the announcement via a high-speed optical fibre cable connection to the interbank market. This allowed them to unwind their positions before they went into negative balances”.

The comments drews widespread derision from rivals. The chief executives of two competitors pointed out the high-speed cable was standard technology used in the industry and connected into NY4, a giant multi-user data centre in New Jersey owned by Equinix, the largest global provider of these structures.

Kerr later clarified to The Weekend Australian that Pepperstone does indeed use Equinix. When asked whether this was technology widely used by brokers, he stated this was not the case as “it is costly to introduce and maintain”.

In previous interviews, Kerr has made much of his and Davenport’s decision to construct their own hardware, software and fibre-optic cable network. And yet Pepperstone uses one of the most popular software programs in the industry, MetaTrader 4, which costs close to $100,000 to buy off the shelf.

Kerr acknowledged MT4 “is not unique” but insisted its “proprietary back-office, client area, aggregation systems, electric communications network, settlement systems, payments infrastructure, IT Technology, Server Farm and low-latency infrastructure” all are.

He said this back-office system has “enabled us to disrupt industry margins and provide low-cost FX brokerage to our client base.”

Pepperstone certainly offers low margins but so too do many other players.

Its recent accounts to June 2014 also reveal little investment in technology.

Instead, the statements show the firm racked up a profit of $28m for the year.

On the back of this, the two founders extracted $32m from the company in dividends, even though their total liabilities stand at $94m compared to $83m in cash and cash equivalents. The accounts also reveal there is a $14m shortfall in clients’ funds with $85m recorded as owed to clients while $71m is held on segregated client accounts.

Australia remains one of the few countries, alongside Cyprus and Mauritius, where brokers can use client funds on deposit as collateral for potential losses incurred by the firm on other currency bets.

The market is fiercely divided about whether greater regulation should be imposed but those in favour argue the current system has enabled mostly online brokers to boost their growth without having to risk much of their own capital.

Yet despite Pepperstone’s relatively slight financial status, Kerr shows no sign of a conservative footing.

In the wake of the Swiss franc shock, he claimed the firm was pursuing one of the largest victims of the currency upheaval, Alpari, which had until that episode ranked as the third-largest forex broker.

A number of players in the industry have expressed surprise at this.

One senior executive within a large forex broker in Britain claimed this would necessitate an enormous outlay, comparable, he said, to the $US300m lifeline provided to US-based FXCM by Leucadia.

In response to questions about this mooted acquisition, Kerr said Pepperstone has “dropped out of the Alpari acquisition process as we thought the price asking (sic) was excessive”. But he insisted the IPO of Pepperstone was still “on track after we complete acquisitions of the distressed brokers in our industry”.

There are doubts though about the appetite of institutional investors towards an IPO, given the broader industry has been left reeling from the Swiss franc shock.
The head of one domestic firm stressed the “hangover” would take some time to dissipate.

Yet while many in the sector remain bemused at Pepperstone’s exuberant descriptions of its business prowess, few dispute the firm’s impressive growth track record.
The trouble is that much of that expansion stemmed from its Japanese exposure from where it is now black-listed after the corporate watchdog, ASIC, discovered the firm was trading there without a valid licence.

In its IPO prospectus, Pepperstone stated 40 per cent of its trading revenue was derived from Japan, while a mere 8 per cent originated from Australia.
The plan now is to concentrate on China, a market widely coveted by brokers due to the swelling ranks of the middle classes and the Chinese love of riskier pursuits like gambling.

Kerr claimed financial services are “the second wave of exports to China” following the collapse of the mining boom and said the “Australian Financial Services Industry can now service this market unfettered”.

He added the China Free Trade Agreement “is great for us”.

However, over-the-counter forex brokers like Pepperstone are specifically excluded from this new trade push.

In its latest results, released last week, IG Markets, a Britain-based company and one of the largest forex brokers, cautioned investors about any excitement from its Chinese operations.

Its Asia Pacific head, Tamas Szabo, insisted “no regulatory framework exists in China or any Free Trade Zone allowing retail OTC foreign exchange brokers to operate”.
He added that while there were encouraging signs “our view is that the regulatory environment is not supportive of a direct offering and is unlikely to be explicitly so for some time”

and yet Alpari UK is a market maker. Who is ignored plain stupid. oh, and you explain please even know the difference between STP and ECN? Since lie namely worlds in between. STP is a closeted MM.

I want my money, not of Pepperstone but Alpari. What I'm interested in the losses of other brokers?

yeh bro your right

Its just another example showing you cant trust any broker!! from now on when i make money ill withdraw it asap

I expect it will be friday again when we here more news!!

Technically ECN has raw spreads + commission and STP has a markup on spreads instead commission. That what you are talking about is I assume something advertised as NDD which is MM without human intervention. Alpari used to have MM accounts in the past, no idea about present but if I had MM account then it was best MM in the world with ECN quality feed + little markup on spreads. In my case I seen often 6pts on EUR/USD.

Actually I'm, cause I did open account with them and didn't make deposit yet.

they are collapsing but the question is
if they are all regulated bt FCA how much fast can fca respond to this problem

I do believe still the positive accounts will be sold to another broker... that would certainly be the best outcome for us, otherwise it could drag on weeks/months