I told my esteemed editor this week that as a result of the delving around we’d been doing, we’d come up with load of buzz, most of which I’m convinced is true and which I will try and detail below. “Don’t tell me that you are going to write about which bank is looking to get a bigger footprint in the retail space,” he snorted. His implication was clear: a retail space is where you go shopping for groceries and if you want a large footprint, you need to wear big boots. In other words, don’t use trite metaphors – and remember this column is not about Tesco’s, Wal-Mart or any other big store. It’s about FX.

But I’m a firm believer in simple words in simple places, and sometimes there’s nothing like a metaphor to bring a story to life. My job is to write in a manner my audience understands. Fancy Dan prose is all well and good and has its place – but not in this column. My audience is a broad church: one extreme is 16-year old school leavers with a handful of basic qualifications, the other rocket scientists with PhDs in astrophysics. However, not too many have Eng Lit degrees. Know wha’ I mean?

Anyway, I accept the banning of terms such as ‘retail space’ and ‘footprint’. Instead, I shall report on who is trying to penetrate the retail sector and how they are going through the backdoor to get their gratification.

I’ve been told that backdoor penetration can sometimes be painful and messy, so a word of warning before you read on:

Whispers getting louder

There are increasingly loud rumours that a couple of Euromoney’s top 10 banks are poised to unveil white-label solutions to target retail clients. One story in particular just won’t go away. I’ve asked both the bank and the white-label provider if the buzz is true – the bank won’t say and the white labeller has requested that I keep quiet for the moment.

“There are rumours about us with quite a few big institutions. I can tell you that nothing is signed and it would be unhelpful if any rumours got out now because negotiations are always ongoing and can sometimes influence decision-makers. Once anything gets signed and we can go public I will definitely let you know,” said a senior figure at the retail platform I won’t yet name.

It’s never been my intention to mess things up for the participants in this great market, just remove the dark mists that sometimes shroud it in mystery.

The who who song

Others, cleverer than me, have argued that because FX is largely an unregulated market, it is really a casino. I hear that some of those online casinos that have faced a well-publicised clamp down in the land of great contradictions known as the United States of America are considering breaking into FX. The buzz is that having signed up millions of clients, they are scratching their heads and wondering what product they can legally deliver to them to satisfy their punting instincts. I hear several have been looking at white-labelled FX trading solutions as the answer.

Interestingly, a couple of the platform providers I spoke to have pointed out that any online FX offering in the US would have to be regulated by the Commodity Futures and Trading Commission. Also, I understand platform providers are fearful about the reputational risk they would face by providing a white-label solution to an online casino. Funny old game, isn’t it?

I don’t want to lose you

Deutsche Bank is one FX behemoth that is definitely keen to grab a slice of the retail pie. Last May, it trumpeted the launch of its dbFX platform, which I later revealed as simply a white-labelling of FXCM.

I had an interesting chat a while back with Zar Amrolia, global head of foreign exchange at Deutsche, about why the bank decided to go with FXCM, which has – how shall I put it? – a mixed reputation in the market. For those that didn’t read it first time, take a look at the Weekly FiX posted on October 20. One of the things I specifically asked Zar was how worried he was about Deutsche’s brand being tarnished by the association with FXCM. Well, the whingeing and whining hasn’t stopped from the punters and the hot gossip is that Deutsche is about to boot out FXCM.

“Deutsche Bank does not comment on individual client, vendor or partnership relationships. Suffice to say that our fledgling online margin FX business is doing very well, with excellent growth in volume, deposits and clients. In addition, our strategy remains unchanged and we do intend to expand on our retail platform,” was Zar’s response. No word as of yet from FXCM.

Brand new thing

Reputational risk is something that is undoubtedly hard to quantify. But make no mistake, once a reputation gets tarnished, it’s hard to buff it back to a glistening shine again. Last week, I got an email from my muckers at Tradex Capital Markets, an established and reputable company based in Greenwich, Connecticut. It had the words urgent notice in the subject line and warned “friends and investors” to: “Please be advised that there is absolutely no relationship, direct or indirect, between the expelled entity “Tradex Group” and our company, Tradex Capital Markets” (their italics).

The company has found itself inadvertently caught up in the woes of the similarly named Tradex Group, which will be barred permanently from carrying out activities in the US by the National Futures Association (NFA) from February 15. The action was taken because Tradex Group had been, according to the NFA: “allegedly soliciting retail investors to trade off-exchange foreign currency futures and options with its parent company, Tradex Handel & Beratungs.”