Monday, May 16, 2016

Latin America: the final frontier for forex and CFDs

Continental FX CEO Miguel Aliaga discusses the huge potential for online forex brokers in Latin America

The forex market is a favourite among experienced and new traders alike; and offers attractive returns when managed correctly. Miguel Aliaga, CEO of Continental FX, explains how the industry is growing day by day, and how brokers are lobbying Chile's regulators to adopt British FCA principles.

World Finance: The forex market is a favourite among experienced and new traders alike; and offers attractive returns when managed correctly. Joining me down the line to discuss the market for Latin America is Miguel Aliaga.

Miguel, let's start with forex trends you're seeing in Latin America; talk me through them.

Miguel Aliaga: Basically, Latin America's the final frontier for the forex and CFD markets. We have seen the evolution of the market, because we have been here from day one.

The major players around the world have neglected this market, because they didn't see the potential. However, it's one of the most sought-after markets right now.

This is a market that is growing day by day. This is with the propagation of the internet in Latin America, where over 70 percent of all households have internet access. There's a very big potential for people.

We have a very solid customer base, because of the education and the infrastructure that we offer our clients. We have seen our industry grow day by day, and that is certainly very encouraging for the work that we're doing.

World Finance: How regulated is the market, then?

Miguel Aliaga: Well – unfortunately, it's not very well regulated. We have challenges in this area, all throughout Latin America.

As you know, we're a Chilean company. And Chile has a good regulation as far as everything else financial goes.

We're currently working with the authorities to regulate this market. We have sent them proposals on how this market should be regulated, based on the regulations of the FCA from Great Britain. That doesn't mean that the companies that are here in Latin America are in the wild west – most of the companies that are here are serious companies, that follow some sort of self-regulatory systems.

We believe that we're getting closer to regulation every day.

World Finance: Now as you say, you are based in Chile where there is a rising middle class; what options are available for people who want to control their own finances?

Miguel Aliaga: Well, there's all the traditional products, or traditional banking products, that are available everywhere else. However, people are starting to learn about these alternative products that have been around for many, many years, in other, more developed economies; that are starting to get the word around in different countries in Latin America.

World Finance: So how does forex sit within this? Is the decline in equities pushing people toward alternatives like foreign exchange trading?

Miguel Aliaga: Oh, absolutely. Definitely. I mean, the markets have been performing so badly – especially in the developing countries, in Chile, Brazil, Argentina and so forth – that people are definitely looking for alternatives. And we're there to help them every step of the way.

World Finance: And in terms of growth: how has the industry developed?

Miguel Aliaga: Well, the industry is definitely growing. It's growing day by day.

We have grown to be the largest broker in Chile. We have multiple liquidity providers, as well as no human intervention or dealing desk, which gives our customers a completely neutral environment to trade with.

We're looking to expand into Argentina, into Peru, into Mexico. We're currently opening up offices in Spain, and we also have offices in Dubai. And that, basically, is fuelling our growth.

World Finance: Finally, looking towards the future: what are going to be the things to watch, when it comes to the forex market?

Miguel Aliaga: The main thing to watch for is who you're dealing with. I'm sure that a lot of new brokers are going to come into play, and what you have to look at is, see if these are constituted in tax havens or if they're local. My recommendation is, always deal with local companies. Companies that are established in the country – that doesn't mean that they can't be multinational companies, just as long as it's established in the country.

Also search for if there are any complaints about that company. Do your due diligence. You have to research the company. Look for companies that have transparency, that have a good track record. Go visit them, see who you're talking to, meet face to face. Those are the main things that you have to look for in this market, when you're dealing in Latin America.


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