Peter, you founded CMC Markets in 1989 and launched Europe’s first online retail trading platform in 1996. What keeps you going to work every day after such an extraordinary career?
That’s a question I get asked all the time I guess because I do not need to work for financial reasons, and I always reply with the same answer. I love having my own company, I love the daily challenges and what is retirement anyway, who wants to play golf every day or sit on a beach. That might appeal to some people but not to me. I have been working since the age of 15, even doing the night shift on Christmas day when I was 16 at my first job Western Union, sending telegrams overseas.
I have a beautiful wife and family, married for 38 years, with successful children and grandchildren. My wife often travels with me on business trips, what’s not to love. Why retire if you love what you are doing. If I live as long as Warren Buffet I will be working for another 25 years!
CMC is invigorating as the financial markets are changing so much. Remember when I launched Europe’s first retail Forex platform back in October 1996, the world could never have imagined how the bulk of financial trading has moved online. We were definitely pioneers of financial trading.
Google didn’t exist, Facebook was not around, even mobile phones were just beginning. The world wide web was really a static page concept compared to now. The fun part of working is to see the changes and adapting to those changes.
Crypto currencies are only ten years old which is another example of how the world’s financial markets are changing, and I love being part of all those changes.
I also love CMC and how we have become a global powerhouse not just in financial trading but also in financial technology. We have major technology partners with Revolut, ASB Bank New Zealand, Strike X and over 300 technology and financial trading partners all over the world.
If you want an example of what a fintech company is then look no further than CMC Markets.
Oh, by the way I will never retire!
It’s well known that you are a self-made businessman who did it the hard way but do you still consider yourself a trader at heart and if so what impact has that had on your success?
Once a trader always a trader or so they say. Of course, I do not get involved in day to day hedging and trading for the company. But I do think it is important for any company involved in trading to have a leader or CEO with the relevant experience. I think I tick that box very well.
You saw the potential for online trading before many others but some people have said that you were also just in the right place at the right time because the arrival of the internet helped you so much. Do you agree with that?
A ridiculous statement to be honest. I worked with many people in the city before I started CMC that were in the right place at the right time. The whole of the City of London was in the right place at the right time but not many started their own companies and built on the potential of the internet. I suppose I was lucky that the Internet was invented and for that matter I was lucky that lap top computers were invented. I suppose I was lucky that Microsoft was invented and created DOS so that we could all use laptops.
But life is about seeing opportunities and monetising those opportunities. That’s what I did.
If you want an example of what a fintech company is then look no further than CMC Markets
How “hands on” are you in the day to running of the firm or is it more about strategy and the bigger picture issues nowadays?
I am very hands on. I am in the office every day before 7.30am, five days a week. I am on all the decision-making committees and teams. I am still driving the business forwards every day. I do have some really good people with me.
Contributing so much to the business and challenging me and themselves. It is an honest and healthy challenging environment, that helps drive the business forwards. My door is always open and I encourage challenge amongst the executives of the business.
Please email Victoria Paling at
v.paling@cmcmarkets.com for a
free signed copy of Peter’s book.
CMC Connect: Standing out from the crowd
Richard Elston, head of CMC Markets Connect Middle East has been with the trading and investment services provider for the last 10 years, having joined as group head of institutional in July 2015.
Many things have changed over that time, perhaps most notably the firm’s evolution from a UK-centric business into a global player with a presence in Singapore, Toronto, Syndey and more recently Dubai.
Having spent more than two years in Dubai, his change of role from group head of Connect to head of Middle East to focus on the opportunity the region presents is further recognition of its growing importance.
CMC executed its first hedge cover trade as long ago as 1996, he explains. “We’ve been licensed here since 2019 but due to the pandemic we really started ramping up in 2022. As an independently regulated office it comes with all the obligations you would expect from a localised business, so my role covers everything from dealing with customers on a commercial basis to handling regulatory and compliance issues,” says Elston.
As the business has grown, the range of clients and instruments supported has also expanded. Dubai in particular has experienced a massive influx of wealth as demonstrated by the number of hedge funds and other international firms that have set up in the DIFC, with commensurate growth in booking volumes over the last five years.
“Our strategy in coming here was based on the potential for liquidity provision,” says Elston. “But if you are looking at liquidity in CFDs and FX you are limiting yourself – multi-asset class is the way to go as you can see from the way our business has adapted to provide investment-grade, exchange-traded assets not just here in the GCC but to a wider audience.”
This enables CMC to provide (either via platform or API) execution in more than 20 different global markets. From a platform perspective, the firm sees enormous scope for growth in developing solutions that deliver transparency to the underlying clients of the institutions it deals with.
“However, in order to achieve that you have to go in with what the market is demanding,” acknowledges Elston. “People want to have cash equities, futures and options in their portfolio and I love the fact that we are able to develop platforms that can address that demand.”
LIQUIDITY
Liquidity provision is an area where CMC excels, in part because it constructs its own pricing. “We have always been a constructor of our own pricing around CFD instruments and our clients tell us that our liquidity is amongst the best in the institutional spot FX space,” says Elston.
The secret to success here is not just providing a pricing and liquidity solution that meet the demands of the client – it’s also about ensuring you have the appropriate and compatible technology that allows you to you get your price to the client and a trade back from them.
“Low latency price construction is one thing but it is also important that the API technology is inherently designed to provide the least amount of speed bumps by making sure the messaging layer used to build the API (as well as between it and other internal components such as risk engines) is optimised to be as fast as possible with a view to providing the best customer experience,” says Elston.
CMC has been asked in the past why it asks so many questions about technology rather than just getting the deal done, adds Elston. “The reality is that it is very difficult to get a deal done if you can’t get what you need to deliver to the client in the first place because of the technology involved. That is the gap that we have always endeavoured to fill.”
CONNECTIVITY
CMC recognises that connectivity is a key consideration for institutions so focuses on constructing technology to fit the geographical market in which the demand is coming from.
“Latency around price construction is the first issue to resolve but there is also inherent latency in the systems used to either get the price out the door or get the execution back in,” says Elston. “Therefore, internal optimisation of electronic workflow is very important.”
CMC is not a HFT house so doesn’t feel under pressure to be the fastest show in town. The emphasis is instead on delivering services via a single interface – whether that is a front-end or an API – and providing it to as many customers as possible.
In terms of using third party technology, the company seeks to work with as many of the popular platforms as possible.
Given that innovation has always been a hallmark of CMC Markets, we concluded by asking how much scope there is for further innovation in the company’s core institutional product offerings.
According to Elston, multi-asset class solutions are incredibly important – even in the retail aggregator space – and there is a gravitational pull towards cash equities and other investment-grade products.
“We want to solve the trading infrastructure challenges of institutions such as private banks,” he says. “We often come across scenarios where we feel the technology being used is suboptimal and because we have proven platform technology we are in a position to combine that with multi-asset classes to provide a solution to the bank, broker or wealth manager as well as their underlying client.”
There is also an acknowledgement that asking a client to rip up all its existing technology is unrealistic. “The fintech partnership we signed with Revolut last year is a good example,” concludes Elston. “It’s predominantly based on REST API technology, so if you can imagine all the good stuff (the account structure, the connectivity to markets with no front-end), instead of delivering a front-end we deliver Open API-style technology that interfaces that with the best of what other people do.”
Another thing that sets you apart from many others in our industry is your long standing commitment to ensuring CMC employs the latest cutting edge technology and trading platforms. How important has that been in turning the firm from a UK-centric business to a global player?
The DNA for this is seeing how our first on-line platform launched in October 1996 changed the business. It turned us into a small boutique business into a global player.
If your readers would like more detail of this journey, then I encourage them to read my book Passport to Success which I would be happy to send any of your readers a free signed copy. I have felt compelled to keep investing in technology and it all stemmed back to 1996.
How would you summarise the key reasons why CMC Markets continues to be the hugely successful business it now is?
We never stop investing, we never stop challenging ourselves and pushing the boundaries. I came from humble beginnings and CMC changed my life and I want to keep pushing it to make it the best company in our industry, if it is not already. I believe that it is.
Looking back at your life and career in the financial trading industry what are you most proud about achieving?
Just the fact that I was successful with my idea about starting my own company. Also, that I never rest on my laurels.
I keep pushing and every day I am proud of what CMC Markets has become, from one single small office, in serviced offices with no windows. Wow I still get a thrill from thinking about that.
In your book you say that over the years any business will face serious challenges. Do you feel you still have a lot to offer CMC Markets and that your experience can be helpful in helping it deal with any difficult issues that may arise as the industry navigates the economically unstable, technologically complex and increasingly volatile age we now live in?
This Company is amazing, and it is important that you enjoy the success but at the same time maintain standards. There will always be challenges in business as in life. The way to tackle those problems, is to face them head on, deal with them and move on quickly.
