Prop Trading Poses Risks for CFD Brokers, But Muinmos and Brokeree Solutions Have a Fix

Regulatory technology firm Muinmos and tech provider Brokeree Solutions have teamed up to address the challenges facing regulated brokers in the proprietary (prop) trading space. With increasing scrutiny on prop trading, the two companies aim to offer solutions that ensure compliance while reducing reputational risks for brokers.

Solving Prop Trading Compliance Issues

The partnership integrates Brokeree’s Prop Pulse technology, designed for account management and risk mitigation, with Muinmos’ client onboarding platform. This powerful combination offers brokers tools to manage compliance and risk in their prop trading activities, a space often viewed as risky.

“Prop trading has been getting a bad rap lately, but with proper risk management and regulatory controls, it can actually provide regulated brokers with a new revenue stream,” said Remonda Kirketerp-Møller, CEO of Muinmos. The new joint solution aims to help brokers offer a safe and compliant prop trading service while avoiding the pitfalls typically associated with the sector.

Navigating Industry Risks

Prop trading differs significantly from CFD trading in that brokers take on direct risk rather than passing it to liquidity providers. This can lead to significant challenges in risk management. According to James Glyde, CEO of PipFarm, these risks are difficult to manage but are crucial for brokers to stay competitive and compliant.

Muinmos and Brokeree Solutions want to help brokers navigate these challenges and avoid the negative reputation that can come with prop trading. "We understand that many brokers are hesitant to offer prop trading due to the reputational risks," said Andrey Kamyshanov, Co-Founder of Brokeree Solutions. "With the right systems in place, brokers can confidently enter the space without risking their good name."

Changing the Perception of Prop Trading

While prop trading has often been associated with high risks and regulatory warnings, many CFD brokers are proving that it can be done safely and responsibly. In fact, some prop firms operate with strict standards to protect investors, much like the early days of CFD trading.

Several well-established CFD brokers, including OANDA, Hantec Markets, IC Markets, and Axi, have recently moved into the prop trading space, providing a new level of trust and transparency. By implementing robust compliance measures, these firms are offering investors a secure way to participate in prop trading, something Muinmos and Brokeree are helping other brokers achieve as well.

This partnership could mark a turning point for prop trading, allowing brokers to safely and confidently tap into a new market while protecting their reputation and clients.