* FXTM founder says forex industry could offer best solution out of crisis *
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Andrey Dashin has lived in Cyprus for many years, becoming part of Limassol’s fast-paced forex trading community, establishing a name by creating the Alpari Family brand.
For the past six months, he has been busy with his new wholly-owned venture, ForexTime (FXTM), a forex trading brand that is aimed at the developing markets of Asia and South America.
Splashing the vibrant green and orange colours around the island, the young image that FXTM projects is also visible in community projects and sports sponsorships, because Dashin believes that those who can, should give back to society.
Although he employs 50 people in Cyprus, he still spends equal amounts of his time between Alpari, that has moved its operation office to London, Alpari Russia and, of course, ForexTime.
“The benefits of setting up operations in Cyprus are obvious. It’s a growing market and I believe that the Cyprus government and the financial authorities have been doing great things to keep Cyprus as the best destination for forex,” he told the Financial Mirror in an interview.
But Dashin is confident that with the right moves and focusing on what we have, as opposed to creating new industries, Cyprus can overcome its present hurdles.
“Cyprus still has its appeal. First of all, it’s all about taxes. It’s not that favourable as before, but it is still much better than many other countries.”
As with many other forex companies, the banking crisis has not affected FXTM as most of the client trading accounts are placed with global banks.
“I still believe in the future of Cyprus, and the main reason for this is we believe in Cypriots. I was surprised when I first came here that I was able to find very good personnel, mature people with very good background and experience working for foreign companies. From a labour perspective, Cyprus is a great place. From a cost perspective, it also costs much less.”
But does it cost less than in Russia?
“Speaking about salaries, I would say it’s probably the same. But in Russia you’re not going to find specific people who are suitable for international companies. In Russia we have educated people with great experience, but not this experience.”
“Salaries in Russia for good staff are close to salaries in the U.S. Talking about the IT sector, its probably easier to find excellent minds there. And also it’s not that easy to move them from Russia to other countries. So, companies decided that it’s easier to keep their IT offices in Russia.”
“Our principle is to have everything in one place. It’s better from a managerial point of view. Speaking about my companies, they are not that big in terms of personnel. In Alpari we have about 700 people. So it’s not that big to have separate IT operations in Russia. We still have some technical support in Russia, but we are trying to move them to Cyprus and to UK.”
ADVANTAGE
Dashin said that one of FXTM’s advantages is that being the newcomer, it can offer new products and services. The company has several technologically new products and others are in the pipeline, including money management services. But he also has reservations about binary options trading.
“This can exist only as additional service to the core operations. I don’t see how some companies could survive from having only binary options. But there is also a lack of industry-wide regulation. Basically, it is regulated here in Cyprus. As I understand it this is the only jurisdiction where it is regulated. For me, as a foreign investor, it would be incredibly risky to put my money in some business that is regulated in only one jurisdiction. If something happens in that jurisdiction it could be the end of my investment. So, without clear regulation, without other countries opening doors to binary, I don’t see a future.”
Dashin said that the main reason for opening ForexTime was his desire to expand into the Asian markets.
“I needed to have a small brand, more flexible, based in a favourable jurisdiction, with more stable and a clear regulatory environment. Regardless of the [economic] crisis and events, our industry is quite stable. Foreign investors feel very uncomfortable investing in some not very stable countries. The U.K., by comparison is very stable. From a regulatory point of view it is probably the most stable developed country. But recently they scrapped the FSA. Now they created a new regulator and in that situation as an investor I don’t think it’s good. The reason for scrapping the FSA was that it didn’t implement its duties. So I don’t know what that means for the new regulator and how they are going to be regulating.”
In any case, the next stop for ForexTime is opening a representative office in London, despite looking to expand into Asia as well.
“London is still a global jurisdiction. Singapore is a very promising target for us, but I don’t think that is going to happen this year.”
Dashin explained that the difference between the Alpari brand and ForexTime is simple: Alpari was created to work in developed countries.
“To work with less developed countries where there is less clear regulation you need to have a more flexible brand, a more flexible company. That’s the difference. It’s like two different tools for two different markets.”
FUTURE OF FOREX?
Coming to the new markets of Asia and South America, “we should absorb the interest that they want and offer them new services. Arriving in the new Asian markets with our own western ideology would be stupid. So, it’s our big advantage compared with other big brands. ForexTime, working on new ground, is going to be in an equal position as regards brand awareness compared with big brands. Big brands with thousands of people are so cumbersome, they cannot make quick decisions. It’s going to be very difficult to compete with smaller brands.”
Andrey Dashin believes that community involvement in Cyprus is important.
“It depends more on personality than on some particular company strategy. We have so many forex companies that from a social perspective don’t do anything.
“I came to this country to live here. I feel myself as a responsible Cyprus citizen. I have resources and manpower, I feel obliged to put something to help this country, especially in this situation when it needs help. Maybe it’s a Russian type of understanding, but from many discussion with foreigners from developed countries about their contribution to society and charity work, some of them say ‘why do we need to do this, we pay taxes, it’s the government’s responsibility’. From one perspective it sounds right. But from my perspective it’s not right, because we can blame governments or disagree with them, but some people need our help to live. And if we can help them, we need to be more responsible and mature citizens.”
“It’s been surprising how quick my family adjusted to the Cyprus way of living. As a family we are self sufficient, even reclusive one might say. It’s not that we don’t have friends. We have friends, but we are not socially active. And also nature is great here and my three children and my wife feel very comfortable. I’ve been able to adjust to the Cyprus pace of living because I don’t live in Cyprus 100%. I travel and for me, when I stay in Cyprus for one week or ten days, it’s already a great achievement.”
“But speaking about the Cyprus pace of living, I haven’t found that Cypriots are slow, on the contrary, they are very hard working people.”
OVERSIZED BANKING
Asked to give his view of what went wrong with the economic crisis, Dashin explained that the core of the problem was oversized banking.
“It’s not a problem with the banking sector itself, any sector that is many times bigger than the economy is going to be bring very big dangers.”
“The major harm has been brought by the mass media hoopla. So if one day we had lost 10% of our money and we hadn’t had any further developments, we would just have lost some our money and we wouldn’t have this situation right now, we wouldn’t find ourselves in this nightmare. It’s not because of some haircuts or something. Of course I believe that haircuts were mismanaged, but the bigger problem is the credibility of Cyprus and it was harmed.”
A word of advice from Dashin would be to bring some certainty. “For business, the most horrible thing is uncertainty. We can adjust to anything, because as business entities, as business minds, we are quite adjustable. But stability is the key. My first advice would be not to make any further mistakes and not to do any drastic move in any direction.
“The government must try to save the image of Cyprus. I read some suggestions from some officials to develop something new and find new sources of money. It’s not going to happen overnight. Governments spend decades on building new sources of money. It’s not going to be able to solve today’s problem with creating new industries.”
Dashin brought the example of investing more in tourism. “With what money? You need to attract investors because Cyprus doesn’t have money to invest on its own. To bring new investors means to bring worldwide brands. They are not going to come with a crisis here, banks with restrictions, with haircuts. Uncertainty is the key.
“Governments they need to understand that for this dream they are going to spend 10-20 years. For today, try to maintain the image of Cyprus, try to maintain the existing sectors. Forex is a great possibility because Cyprus has already been able to establish itself as a forex industry hub. The great thing would be to apply more effort in this area.
Andrey Dashin said that the Securities and Exchange Commission, CySEC, is doing a great job.
“The new board of CySEC has people from business. What I like about our collaboration with local authorities, they come and openly ask for our advice. They listen to us, they know our concerns. They make their own decisions, but they base their decision on our opinion as well. It’s a great collaboration. The majority of regulators in other countries don’t take into consideration the opinion of business, they create some rules and some rules don’t work at all.”
Concluding the interview, Dashin said that he doesn’t want to move anywhere else.
“Of course it’s all going to depend on the economy, regulation and many other things. I believe in Cyprus. In five years I hope to have the same status, but in a more developed country.”
