|Current Status||Concept / Business Plan|
|Funding Required||RM600,001 to RM1,000,000|
|Description||A forex brokerage is an entity that connects retail forex traders (i.e. individuals that trade on the foreign exchange market) with the forex market. The forex market is traded on the “interbank” which is a fancy way of saying banks trade electronically with each other at various prices that vary from bank to bank.
The growth of forex brokerages can be attributed to the fact that, now more than ever; people wish to make money from home rather than going to work and putting money into someone else’s pocket. Among these people are Forex traders – people that predict the price movements of various currencies from around the world in order to make a profit. To do this, they need Forex brokers; so, the more “home traders” there are, the more Forex brokers will increase.
|Business Opportunity||The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies.
The rapidly growing number of new and experienced traders flocking to the $5.4 trillion a day currency market need a good broker to begin with.
This has created a huge potential for enterprising individuals to meet their requirement for a safe place to do their trading.
|Revenue / Business Model||1. Don’t over-make your market.
Forex brokers get their spread cost between two currencies (i.e. EUR/USD) from the Interbank market. The Interbank market is simply a collection of major banks, hedge funds and financial institutions that are legally obliged to serve commercial turnover of currency investments as well as a large amount of speculative, short-term currency trading.
For example, if the Interbank market charges 1 pip on EUR/USD, a large volume of Forex brokers mark this up to around 3 pips. This means that they make a profit of 2 pips on every trade for this currency. In essence, they are making their own market by over-charging their customers. This is a certain recipe for disaster as this makes Forex trading expensive.
2. Offer low or no commission.
3. Ensure world class support.
To stay competitive, and in-tune with customers, support must be high quality and responsive. For instance, if a customer asks a question about your platform’s usage, support must provide specific instructions on how to resolve the issue. Also, withdrawing funds should be a seamless process that does not take more than 2 days to process. It is small factors such as this that will eliminate any doubts in the customers’ mind about your services.
|Management Team||Our Management Team is a dedicated group of finance, technology, legal, marketing and sales professionals committed to making Our forex brokerage Business a leading financial institution.|
|Company Background||We are looking for funding to start up the forex brokerage business.|
|Funding Milestone||1 Millions MYR Funding Required|
|% Equity Allocation||70% For Investors|
|Expected ROI||35% – 55% Of Returns to Investors/ Funders|
|Risks and Mitigation||The foreign exchange market, also known as the forex market, facilitates the buying and selling of currencies around the world. Like stocks, the end goal of forex trading is to yield a net profit by buying low and selling high. Forex traders have the advantage of choosing a handful of currencies over stock traders who must parse thousands of companies and sectors. In terms of trading volume, forex markets are the largest in the world.
1. Leverage Risks
2. Interest Rate Risks
3. Transaction Risks
4. Counterparty Risk
5. Country Risk
6. Operational Risk
Brokers face operational risk as they transact their daily business activities. Some of these risks arise as internal procedures, human resources, organizational structure, technology, etc. Although they do not impose a risk to the market system as a whole, they could prevent you from monitoring positions or placing orders. Forex traders should always maintain backup procedures in case the Internet or power fails.
|Company Name||XeC Finance Limited|
|Business Address||Kuala Lumpur|
|Contact Person||Mr. Lee|