INTL FCStone 2013 Annual Report Download - page 11

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and OTC products including 24-hour execution in
spot, forwards, EFP and options, as well as NDFs in
both liquid and exotic currencies. We also provide
a wide range of structured product solutions to our
commercial customers looking to nd cost-effective
hedging.
Our objective is to deliver our customers efcient
24-hour execution in the global foreign exchange
markets. We have leveraged our experience in both
OTC and listed markets to provide our customers
with access to liquidity. We offer proprietary
technology with aggregated multiple liquidity
streams that allows direct peer-to-peer trading
combined with cleared prime brokerage. We also
act as market makers in less-liquid currencies for
our customers in less-liquid
exotic markets as well as in
structured products.
In line with our strategy to
differentiate our offering, we
have focused on three key
service niches:
• high-touch hedging and
execution services to
commercial customers
of the Company from
simple forwards and
options to structured
and customized
products;
• access to deep pools
of liquidity for nancial
institutions and
professional traders
through a wide range of market makers
utilizing technology to provide low-latency
execution; and
• arbitrage activities between exchanges and
OTC markets where we take advantage
of pricing anomalies with the objective of
eliminating any directional exposure to the
market.
The foreign exchange market is one of the largest
nancial markets, but the current regulatory
changes could prove disruptive for the large
incumbent players including the large banks. As an
FCM, SD and broker-dealer in the U.S., we believe
that we are ideally placed in this rapidly changing
regulatory environment to provide all of our
customers with comprehensive foreign exchange
execution capability and potentially expand our
customer base and global footprint.
Securities
Through INTL FCStone Securities Inc. (“INTL FCStone
Securities”), a registered broker-dealer in the U.S.,
the Company provides a complete suite of execution
services in securities. In line with our corporate
strategy, we have focused on providing value-added
solutions that facilitate cross border trading, which
is more complex and involves foreign exchange
transactions as well as an understanding of local
market conventions, liquidity and settlement
protocols. Our customers include U.S.-based
regional and national broker-dealers and institutions
investing or executing customer transactions in
international markets, and foreign institutions
seeking access to the U.S. securities markets. We are
also a regulated broker-dealer in Argentina, where
we are active in providing
institutional executions in
the local capital markets.
We are one of the leading
market makers in foreign
securities, including unlisted
ADRs and foreign ordinary
shares. The Company makes
markets in approximately
800 ADRs and foreign
ordinary shares traded on
the OTC market and will,
on request, make prices
in more than 8,000 other
ADRs and foreign ordinary
shares. We also provide a
wide range of execution
services across asset
classes, including xed income, equities and ETFs
for domestic and internationally based nancial
services organizations on a commission basis. We
also provide prime brokerage and “piggyback”
clearing for international customers. When acting
as a market maker, we provide liquidity for our
customers, which requires us to manage and allocate
capital effectively, maintain reliable technology
and be connected to a wide range of liquidity
sources including exchanges, other broker-dealers
and market makers, electronic communications
networks (ECN) and other liquidity sources.
This business started 10 years ago as a specialist
market maker in unlisted ADRs and gained a
reputation as a leading franchise in this market niche
serving the largest nancial organizations in the U.S.
More recently, we have been able to leverage this
franchise and these customer relationships into a
more broadly based high-touch agency execution
“We are one of the leading
market makers in foreign
securities, including
unlisted ADRs and foreign
ordinary shares.”