Muinmos, a RegTech company, and Brokeree Solutions, a technology provider, have teamed up to tackle compliance and risk management challenges in proprietary (prop) trading for regulated brokers. With growing concerns about the legitimacy and regulation of prop trading, their partnership aims to provide a competitive and compliant solution for brokers in the industry.
Addressing Prop Trading Compliance
The partnership combines Brokeree’s Prop Pulse technology, which helps manage accounts and mitigate risks, with Muinmos’ client onboarding system. This collaboration is designed to help FX brokers comply with regulations and manage risks associated with prop trading activities.
According to Remonda Kirketerp-Møller, CEO of Muinmos, prop trading offers regulated brokers an additional revenue stream if handled correctly. “Despite the negative perception around prop trading, with the right controls and risk management, it can be a valuable opportunity,” she explained. The partnership will allow brokers to provide a secure and competitive prop trading option while staying compliant with industry regulations.
Industry Risks and Solutions
Prop trading is often viewed with skepticism due to its unique risks, which differ from those in CFD trading. In prop trading, brokers take on more risk because they manage their own funds rather than transferring the risk to liquidity providers. This makes risk management more complex.
James Glyde, CEO of PipFarm, highlighted the complexity of managing these risks, noting that they are difficult to control but essential for brokers who want to operate safely.
Muinmos and Brokeree Solutions aim to address these concerns and reduce the reputational risks brokers face when offering prop trading services. Andrey Kamyshanov, Co-Founder of Brokeree Solutions, emphasized that their combined expertise will help brokers offer reliable and compliant prop trading services without compromising their reputation.
A New Era for Prop Trading
Though prop trading has faced negative perceptions, it parallels the challenges that CFDs once encountered. While regulators caution against many prop firms, some legitimate companies follow strict standards to ensure investor safety.
Several CFD brokers, including OANDA, Hantec Markets, IC Markets, and Axi, have recently entered the prop trading space, offering higher-quality services with regulatory oversight. These brokers aim to provide safer and more transparent trading experiences for investors.
Muinmos and Brokeree Solutions hope to usher in a new era of compliant and competitive prop trading, helping regulated brokers safely enter this evolving market.