FCA regulated arm of China based online brokerage group Formax Group is getting set to make a large marketing push in the UK and Europe.
To that end, the company’s UK subsidiary Formax Prime Capital (UK) Limited has incurred a 2017 fiscal year (ended March 31) loss of £707,834, on just £42,000 of revenues. (But again, the company has still effectively been in start-up mode until now).
The company’s financials also indicated a going concern issue for Formax UK which – after the £700K loss in 2017 and an accumulated £1.3 million loss since launch – has net capital of less than £200,000 as of March 31, 2017. Presumably, the company’s shareholders plan to inject more capital into the company to enable the marketing push planned later this year.
In January 2015 Formax Group obtained an FCA license for its aforementioned UK subsidiary, and has been preparing for its UK/Europe launch since.Formax Group was founded by Chinese entrepreneurs Bill Chan and Charles Mao in 2012. After raising VC funds, Formax received a Hong Kong SFC Asset Management Type 9 License in early 2014, to which it later that year added a Securities Trading Type 1 License, and a Futures Contract Trading Type 2 license.
Formax also had a little run-in with Australian regulator ASIC in late 2015. Formax had acquired an ASIC-licensed company called Australian Capital Markets Advisory Services Pty Ltd (or ‘ACMAS’), which had ceased activity, and as such had its AFS license suspended by ASIC. ASIC then forced Formax Group to remove what it called ‘false statements’ from its website, which had stated that the AFS license was suspended ‘as part of a normal practice that occurs whenever an enterprise restructures‘, which simply wasn’t true.
Apparently, Formax UK plans to launch using the popular MT4 platform, and also will offer the ZuluTrade auto trading platform to its clients. Based on a minimum £1,000 deposit requirement for new accounts, it looks like Formax UK will be after the higher end segment of the UK online trading market. And, based on the company’s legal name (Formax Prime…), it looks like they will also be angling for prime brokerage business.
Formax UK have been in a period of set-up over the last 12 months, ensuring before we launch to the wider market we have a sustainable and scalable infrastructure in place.Formax Director of FX David Rapp provided this exclusive comment to LeapRate about the planned launch:
Our parent company Formax Group, utilising their own bespoke proprietary Bridge Technology have heavily invested in people, systems, technology and marketing ahead of our launch and are focused on a strong marketing and sales push in the coming months to begin to scale the business.
After a soft test launch we’ve seen an increase in accounts opened with us and we are now looking to ramp this activity up over the next few months, with a new look website and other marketing activity launching soon. The new site will be a valuable tool for our trader clients, with useful content and market analysis.
We’re excited about where this activity will take us and it will help to push our values of transparency and trust out to a wider trading audience. Our focus is on our A Book trading model, meaning 100% of our trades go to market, unlike some of our competitors and our FCA regulated status and strong focus on compliance ensures all client monies are kept secure and segregated from company funds at all times.
read more: https://www.leaprate.com/forex/brokers/formax-uk-loss-fca-brokerage-launch/