START YOUR OWN BROKERAGE

PRESENTED BY

BOSTON TECHNOLOGIES

• Boston Technologies is the inventor of the first commercial MT4 bridge and Start Your Own Brokerage (SYOB) package

• Established: April 2007

• Revenue growth year over year

• Developed Network Infrastructure with data centers in New York NY4, London LD4, Tokyo TY3, and Hong Kong

• Platforms supported: MT4, FIX API, HotSpot, Integral, Currenex, FXAll, FXone, First Derivatives, FlexTrade, 360T, and EBS Direct

• Headquartered in Boston with offices in New York, London, Tokyo, and Shanghai

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WHY START AN FX BROKERAGE?

Foreign Exchange Trading (Forex or FX) Generates

$5.3 trillion per day in Trading Volume

• No limit on growth ceiling

• 24 hour a day revenue opportunity

• FXCM & Gain Capital are publicly traded

• High margins, minimal startup capital and infrastructure – Fast to break even

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$ 3.47 Billion

$191Billion

$437.4 Billion

$5.3Trillion

NYSE Equities Futures Forex

IB VS. SYOB

Introducing Broker Your Own Brokerage

Limitations:

• No Business Ownership

• No Control of Messaging

• Revenue Sharing

Revenue Generation Example:

• $500MM in Trading Volume/Month

• Example: Average 0.1 pip commission or rebate

• IB Revenue = $5,000

Advantages:

• Own Your Own Business

• Build Your Own Reputation

• Create Your Own Revenue Potential

Revenue Generation Example:

• $500MM in Trading Volume/Month

• Example: Average 2 pip mark-up

• Broker Revenue = $100,000

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START YOUR OWN BROKERAGE VS. WHITE LABEL

Your Own Brokerage White Label

Own Your Own Business – Build your own

equity

An extension of an already established

brokerage

More Control – Customize your own

business

Little control with no ownership

Unlimited Sub White Labels – Receive a

share from unlimited white labels

Can not offer sub white labels

No Conflict of Interest – No ties to a specific

broker

Direct competition with the broker

Greater revenue Opportunity – Unlimited

growth

Broker shares in revenue

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FX BROKERAGE STARTUP NEEDS

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INCORPORATION OPTIONS

Level Sample

Jurisdiction

Time Capital Requirements Additional Fee

Unregulated Seychelles 1 week $0 $2,500

Regulated – Low

Regulated -

Medium

British Virgin

Islands

Cyprus

3-6 months

6 months

$10,000 for license

$100,000 in account

EUR 200,000 (STP)

EUR 1,000,000 (DD)

~$5,000

$45,000

Regulated - High United Kingdom 6-12 months EUR 250,000 (STP)

EUR 1,00,000 (DD)

~GBP 40,000

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TYPICAL MT4 BRIDGE / PLATFORM STRUCTURE

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METATRADER 4 (MT4) TRADING PLATFORM

• MT4 released in 2005

• 2.5 Million FX Traders Use MT4 Everyday

• Leading Platform for Expert Advisors (EAs)

• Accessible and User-friendly Interface

• Comprehensive Trader Features and

Functionality

• Includes Graph; Pre-set Indicators; Mobile

• Stable Internet connection in poor conditions

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AGENCY VS PRINCIPALAgency (STP) Model Principal(Market Maker)

Variable spreads that typically widen during newsPredominantly fixed spreads, sometimes even 4-digit prices. Freezes during the news

No conflict of interest between Broker and TraderInherent conflict of interest between Broker and Trader as Broker’s P&L is dependent on users’ profitability

No re-quotes, 99.7% execution ratioTypically requotes, rejects for larger orders and uncomfortable flow

Comfortably executing high frequency, algo (EA) trades Difficulty handling high frequency predatory Flow

Typically has issues with offsetting small trades(<2 st lots) due to high processing costs

Typically has issues accepting larger size orders

Investment in infrastructure and middleware is required Less expensive infrastructure (only MT4 server required)

Consistent profitability makes company attractive to potential investors

Monthly P&L swings can cause inconsistent and volatile profitability picture

Model preferred by regulators, less capital intensive Requires high capitalization in regulated environment, more reporting

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STP REVENUE POTENTIALRevenue forecasting assumption adding 10 new traders per month:

1. Avg. Deposit: $5,000*2. Avg. Trade Volume Multiple

• Low: 500X (manual traders)• High: 1,000X (algo traders)

3. Avg. Markup: 2 pips (1 pip per side)

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Mo

nth

1

Mo

nth

3

Mo

nth

6

Mo

nth

9

Mo

nth

12

Mo

nth

15

Mo

nth

18

Mo

nth

21

Mo

nth

24

Mo

nth

27

Mo

nth

30

Mo

nth

33

Mo

nth

36

Revenue - Low

Revenue - High

*ForexMagnates

**Estimate based on forecasting example

Monthly revenue of

$180K to $360K

$4 million Annual

Business After 3 Years** =

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• Incorporation / Corporate Banking

• Legal Framework

• Custom Branded MT4 Trading Platform

• Hardware & Datacenter Hosting to run

the platform (NY4;LD4;TY3,HK)

• Robust and fully customizable

reporting & BackOffice accounting

• 24 Hour Real-time monitoring

• Risk management software

• White-Label Options

• Access to our experience and FX/MT4

expertise

• Personal Account Executive

• FX, Metals and CFD liquidity

BOSTON TECHNOLOGIES’ TURN KEY SOLUTION

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• One Point of Contact: Boston Technologies

• Partnerships designed with mutual incentives

• Take advantage of BT’s experience with other customers

• Compete with same setup as any large brokerage ( FXCM, Gain..)

• Proven leader and innovator of FX technology

• Access to our best in class network of trusted partners

BT SYOB PACKAGE BENEFITS

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HIRE EXPERIENCE

Source: http://money.cnn.com/2012/08/09/technology/knight-expensive-computer-bug/

Software bugs

$400 million bug - Knight Capital 2012 catastrophic event

Leverage an entire company of experts to avoid:

Human configuration mistakes

Price feed from unreliable vendors

Price spikes, price interruptions

No backup / disaster recovery plan

TECHNOLOGY AND LIQUIDITY COSTS

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Item DIY (Do It Yourself) cost Managed Provider

Hardware3 dedicated machines

Buy top of the line hardware (live+demo+backup)+

delivery +setup: ~$9,000

Lease top of the line hardware:

(live+demo+backup)+ delivery +setup:

~$10,000 over 3 years

Hosting6 Units

Colocation facility (+power + network):

Buy full rack (42-55 Units)

~$10,000-$15,000 per month

6 units (+power+network):

~$1,500-$2,000 per month

Plugins

PAMM Plugin

~2 months development + QA @$40 per hour

~67,000

$1,500 per month off-the-shelf

24 hour support 3 shifts, 1 full time person per shift @ $40,000/year

~$10,000 per month

$2,000-3,000 per month

Web Dev

(Trader Room)

1 person @30,000/year

~$2,500/month

$2,000 setup, $600 monthly

off-the-shelf

Aggregator 2 years, 3 full time developers @100,000/year

~$600,000

$10,000-$20,000 setup

$3-$7 per million

TOTALS One Time Fees $250,000-500,000

Monthly Fees $20,000-50,000

One Time Fee $25,000-78,000

Monthly Fees $2,000-3,000

BROKERAGE TECHNOLOGY ADD ON’S

• Mobile Access (iPhone, iPad, Android, Tablets)

• Multi-Account Manager Plugin

• Real-time News Feeds

• Market Depth

• One-Click Trading

• Price Widget for Website

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SYOB DEPLOYMENT STEPSApproximate 8 Week Process

1. Agreement Signed by Client

2. Compliance Documents Completed

3. BT Due Diligence Review

4. Incorporation

5. Brokerage Bank Account Application

6. Brokerage Bank Account Set Up

7.Complete MetaQuotes White Label Request

8. MetaQuotes White Label Processing

9. Platform Settings with Account Management

10. Configuration

11. UAT Deposit

12. UAT Acceptance

CONTACT US

• Phone: +1(617)-314-6800

• E-mail: sales@bostontechnologies.com

• www.bostontechnologies.com

Boston Technologies Inc.

280 Summer Street, 9th Floor

Boston, MA 02210

Phone：+1 617 314 6800

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