These days there seems to be no serious broker company at Forex market, which is not trying to become as closer as possible to its clients. As a rule, this concerns setting tighter relationships with traders by providing most profitable trading terms and developing various bonus and partner programs. According to specialists, at modern stage struggle for clients is a basis of competition between brokers.
However, Concord Bay company, offering traders to become its co-owners, has gone further than others.
Basics of Concord Bay Strategy
Concord Bay explains that the idea to provide traders with a right to become co-owners of the broker company has not appeared by chance. In fact, it is a direct continuation of realizing a business philosophy, according to which traders and brokers at Forex market are not some kind of rivals. On the contrary, they work together, thus helping each other to make profit. For this reason, Concord Bay says that it is too little to create most convenient terms for traders, they are to be incorporated in general business as deep as possible, given vote to decide even most significant questions, and, certainly, shared the company’s profit with. For, in fact, successful traders allow brokers to earn money.
Concord Bay believes that the main values are professionalism, clarity, effectiveness, innovations, and high-quality service. A broker is absolutely neutral when effecting deals of traders that cooperate with him. The main task here is supposed to be providing a client with free access to the market and avoiding conflict of interests between a trader and the company. In other words, a broker has to work for a client, but not against him, as it sometimes happens at Forex market.
At the same time, Concord Bay implements most up-to-date technologies of Internet-trading, trying to predict the next stages of development in this sphere. The company finds providing most convenient conditions for traders’ work and highest speed of order fulfillment and effecting transactions not achievements, but basic, compulsory conditions.
Concord Bay is a young company at Forex market, which has recently opened its door to clients. However, as explained by its specialist, serious preparation to appearance at the market has been held for eighteen months. In particular, there has been created a modern infrastructure, developed standards of tightest partner relationships with future clients, etc. For this purpose Concord Bay has tried to maximally consider the experience of leading players at Forex market in order to, on the one hand, to use the best what market leaders have managed to accumulate. On the other hand, on no account to make mistakes, which have already been made by its current rivals. (For more details see article: Concord Bay Opens Doors for Russian clients at FOREX currency market - Editor)
As a result, Concord Bay has appeared as the first and yet the only broker company, organized by a model of co-ownership with traders. According to broker representatives, 30% of the company’s property belongs to its clients. At the same, traders that are co-owners of Concord Bay get dividends from turnover of the broker. They also take part in development of the company’s development strategy, which gives an opportunity to improve terms of work at Forex market for ordinary traders even more.
Features of Concord Bay LP Co-ownership Program
How to become a co-owner of Concord Bay, and what benefits do ordinary traders get in this case? These and other questions have been discussed with a representative of the company Aleksandr Blinov.
Market Leader: – Terms of including traders into the number of partners-co-owners, which can be found at Concord Bay official web site, mention that a minimal volume of deals for getting a part of property has to amount to 50 mln. dollars per year. Please, explain what is meant by such volume of deals, and what minimal capital is needed for this? Do many traders, working at domestic Forex market, can reach such turnover?
Aleksandr Blinov: – 50 mln. dollars per year is a volume, which can be reached by a trader without great effort. Let me give an example:
Let us say, we trade an 0.1 lot from standard – this is $ 10,000.
Every closed deal multiplies this volume by two – total amount $ 20,000.
Supposing, a trader effect 15 such deals per day – $ 300,000.
Supposing, a trader trades for 16 days per month – $ 4,800,000.
Take one year excluding vacation – 11 months – $ 52,800,000.
And everything you need for this is 100 dollars considering the leverage availability 1:100.
If to accept permissible risk as 20% of the capital, a trader’s then has to have 500 dollars on his account. As you see, requirements are more than mundane. Mind you, numbers in the example are greatly understated. A truly active trader will reach the minimal volume much quicker. And the higher volume he reaches during a financial year, the bigger will be his share in the company.
All this means that the great majority of those, who have chosen Forex as a profession or hobby, will become co-owners of the company without great effort, simply by doing their thing.
Market Leader: – What other terms are set forth for traders so that they could become co-owners of Concord Bay company?
Aleksandr Blinov: – The only thing, required from a trader, is to successfully do what brings him pleasure in the form of income, namely, to trade. And in order to get income one needs a reliable partner with favourable terms. Our web site has a specially developed calculator, which allows to find out how profitable or not certain terms are.
Market Leader: – Your web site also mentions a point, according to which “a share of the company is transferred to clients without any contribution, by mere results of trading volumes”. Does this mean that the share of property will depend not so much on volumes of effected deals, but on the percentage of volume made by his deals? How like, in such a case, will dividends be calculated, and won’t it happen so that by the end of the year a trader will lose income from co-ownership of Concord Bay property Concord Bay if he increases the volume of deals slower than other clients on average?
Aleksandr Blinov: – The share of company’s ownership certainly depends on personal contribution, made by a trader by gaining annual volume of trade. In other words, if I have traded 51 mln., and you - 101 mln., it will be unfair to distribute income equally in relation to you, for you have made bigger contribution into the same dividends, which means that you are supposed to get more profit.
In this reference it is worth mentioning that the bigger number of traders are striving to become partners of the company, the bigger will be the “pie”, which will be shared between partners. And consequently will be everyone’s income in terms of money, which will rise proportionately.
Market Leader: – How is registration of rights of traders’ shared ownership effected according to Concord Bay program? Please, tell us more about the Constitution of Partnership that you offer, and how is it different from ordinary conditions of cooperation with clients, which brokers document in their statutes and cooperation agreements with traders?
Aleksandr Blinov: – There is an agreement for providing services, which is a standard for most brokers document, according to which a client gets access to the market. In our case such agreement also is obligatory. However, besides this, as you have already mentioned, there is a Constitution of Partnership. Constitution is a constituent document, which spells out rights and obligations of partners-co-owners of the business. To put it simply, according to the Constitution, the main company has obligations on payment of dividends to its partners, providing them with accounting reports and rights to take part in the company’s management.
And partners have rights to all this.
The Constitution confers the rights to co-owners by introding changes into the list of partners. In fact, for your trade with Concord Bay, the company renders you its stocks free of charge.
Market Leader: – The rights of co-owners include the opportunity to get access to the company’s accounting documents. What information is your company ready to share with traders-co-owners? How will this happen, and aren’t you afraid of unwanted leak of important information?
Aleksandr Blinov: – Financial reports are secret only is there is what to hide. Any partner will be able get quarterly and annual financial reports at short notice. Such reports are not secret by their definition; they are published in order to show absence of affairs from the broker.
Market Leader: – Please, tell us about participation of traders-co-owners in management of the company and making strategic decisions. How is this process supposed to happen, and how decisive can votes of traders prove to be on condition that 70% of property belongs not to them?
Aleksandr Blinov: – By direct vote the partners will be able to choose two representatives at the Board of Directors. In such a way, a Representative Committee of Traders is formed inside the company; it is an independent management tool, subject exclusively to clients. They will take part in the company’s development on behalf of community of traders by participation in all meetings, held by the company, thus having influence on development general strategy general and directing the company in the direction, favourable for traders.
Market Leader: – Please, explain the point about responsibility of partners for debts and obligations of the company. Won’t it happen so that in case of the company’s default a successful trader will be bound to settle its obligations? For co-owners usually have such obligations…
Aleksandr Blinov: – In this reference, one is to clearly picture a structure of a legal organization called Limited Partnership (LP), which, in fact, is a partnership with limited responsibility. By definition of LP, its co-owners are divided into managing partners (General Partner) and partners with limited responsibility (Limited Partner). Managing partners have full responsibility for all obligations of the company, whereas clients-co-owners of Concord Bay are reffered to the second class of partners, and by the law and according to the Constitution of Partnership, do not have such responsibility.
It is also worth mentioning that Concord Bay strictly folllows to the practice of separating traders’ means from those of the company, which allows to eliminate the risk of their loss. Therefore, entire responsibility lies exclusively on company, but on no account on its partners.
Market Leader: – When will a trader-partner get the part of the company’s profit, which he has gained? Can there already be made any predictions on how much money can be earned with the help of this program?
Aleksandr Blinov: – Dividends are paid at the end of financial year not later than August 31st. Speaking about predictions, I do not yet have any information about this. The point is that the idea of co-ownership currently is unique, and it is hard to objectively estimate the rate of growth of the number of co-owners. Everything depends on how this idea is perceived by traders’ community. Maybe, closer to New Year I will be able to answer this question more clearly.
Market Leader: – In case of successful realization of Concord Bay partnership program the company will certainly get high competitive advantage at the market. What place are you planning to take in domestic forex-business and on international level?
Aleksandr Blinov: – Competition at Forex market is rather high. But I am convinced that, along with the favourable trading terms that we offer, the model of co-ownership will allow the company to take highest places among brokers, trusted by traders.
Market Leader: – What other benefits will an ordinary trader get if he becomes a client of Concord Bay company?
Aleksandr Blinov: – Supposingly, the greatest benefit for a trader is unquestioning ECN/STP model of broker activity. This factor gives most favourable prices at the market, and this model allows to eliminate any affairs from a broker, which in its turn is a formula for success of any trading strategy.
