FNG is pleased to speak today with Barry Flanigan, Head of e-Trading at leading London-based prime-of-prime broker and liquidity solutions provider iSAM Securities.
FNG: Hi Barry. Can you tell us about your role and journey at iSAM Group, from its inception and early days of joining the FX industry?
Barry: I joined iSAM in 2009 when it was just a small team, operating as a discretionary hedge fund out of Cape Town. In 2010, as our assets grew, I moved to London as we began to institutionalize and grow the business into what became Systematic CTA (at the time of going to press, managing nearly $6 billion AUM), after merging with a family office in New York in 2011. Initially, my focus was on operations and trading, but since the team was very small, I was involved in almost all parts of the business.
As we expanded the fund, I led the integration of OTC FX trading as we looked to grow our assets and product mix. This was particularly important given that product diversification is a key element of a CTA fund. OTC trading broke new ground and was the beginning of opening the frontiers to new markets, of which the fund now trades more than 600 different instruments.
Moving into 2013, recognizing the opportunity to repeat our market-side success, we launched iSAM FX. This venture paved the way for us to enter the sell-side, serving a wider market with our technology-driven approach to identify forex liquidity optimization and the seeds of our long-term ambition.
FNG: There have been a few different iterations of iSAM Securities, how has that evolution contributed to making you the company you are today?
Barry: When we first started iSAM Securities (formerly iS Prime), we gained attention and recognition in the industry with our focus on high-performance technology. There seemed to be a misconception that the retail industry wasn’t ready or wanted that kind of sophistication, but it was a huge success and we were in a position where we were offering Institutional, Hedge Fund grade products that retail traders could leverage their business away from. This has allowed many of our clients to focus on marketing and distribution, which they are truly adept at doing at scale.
Our eventual transition to iSAM Securities signaled our commitment to a vision. With more than 50 professionals in quantitative research, e-trading, engineering and sales, we leverage our hedge fund DNA to deliver sophisticated trading solutions to clients.
While we share functions such as legal, compliance and risk within the iSAM group, iSAM Securities operates autonomously and with clarity, focusing on delivering cutting-edge products and technology to the market.
FNG: What trends have you observed in recent market demand and how has iSAM Securities adapted to address it?
Barry: The retail segment is highly sensitive to price fluctuations and relies heavily on stability. We found a clear challenge in that relying solely on price aggregation and third-party suppliers made it very difficult to guarantee stability in a market that can be highly idiosyncratic and often diverse.
In response to this, we have gradually shifted our focus away from a purely brokerage model and into the market-making space, aiming to address the inefficiencies associated with some of its dependencies.
This initial step was to take full control of our offering and ‘price curation’ for clients and eventually move away from sole reliance on liquidity inflows into an aggregation engine. We have been arguing for years that simply adding double LPs and brokers to a client price has a false economy, which has a detrimental effect on the value of the flow and non-trivial costs (direct and indirect) on networks and trading systems.
By reinvesting success in resources, both human and technological, we have developed a purpose-built, proprietary product that is fully customizable for customers and is built on our ultra-low latency platform (that’s not just a buzzword, our systems operate in microseconds for billing and execution).
The net result is that the current product and service we offer our customers – the retail broker and, by extension, their millions of end users – gains a strong and prominent product from which to build their business and their reputation.
FNG: What are you most proud of in iSAM Securities’ journey so far?
Barry: I’ve always been much more proud of how we built our business, rather than financial or corporate accolades. We have amazingly smart people who have helped achieve each milestone, but ultimately, we are much greater than the sum of the individual elements.
Looking back, and you don’t realize it at the time, it’s been an extraordinary journey from a small organization to over 160 people across the iSAM team, all with material contributions. Throughout this growth, we have remained focused on hiring the right people, with the right skills, at the right time. We have also diligently learned from the market and our customers, incorporating these lessons into our daily practices and ethics.
We also stayed true to our strengths and expertise, even when it meant forging our own path. I often say that there is never a dull day at iSAM Securities as we focus on continuous improvement and making a positive impact every day. I believe we have made a significant contribution to the industry while maintaining our integrity. As we move forward, this dedication will continue to drive our growth and shape our future endeavors.
FNG: And finally, can you describe or shed some light on the future aspirations for iSAM Securities?
Barry: As we look ahead, we are focused on leveraging our success with our retail broker clients to further diversify into the wholesale market.
While we have made significant strides in serving retail brokers, we recognize the enormous potential to expand our reach to institutional clients. With established distribution partners and a deep understanding of the wholesale market, we believe we are well positioned to bridge this gap.
Our future plans include bringing together the strengths of both divisions to deliver a unique product that sets us apart from our peers in both spaces. By integrating the retail and institutional markets, we aim to unlock new opportunities and provide a level of access not available elsewhere.
This niche but fortunate position only strengthens our competitive advantage and also reinforces our commitment to drive innovation and the future of trading.
Regulated by the FCA, SFC and CTFC, and CIMA registered, iSAM Securities is a leading algorithmic trading firm and a trusted liquidity, technology and leading service partner to institutional clients and trading venues worldwide. The firm offers full prime brokerage and execution services through its proprietary cutting edge technology as well as market leading analytics.
For more information, please visit, isam-securities.com.
The iSAM Securities brand includes iSAM Securities (UK) Limited, iSAM Securities (HK) Limited, iSAM Securities (Global) Limited, iSAM Securities (USA) Inc. and iSAM Securities Limited.