Multi-asset brokerage Blackwell Global, with main offices in Cyprus, Hong Kong, New Zealand and the United Kingdom, yesterday started their business in Cambodia after receiving a derivative broker’s licence from the Securities and Exchange Commission of Cambodia (SECC) early last year.
“Blackwell Global has added yet another notch on its belt with the successful acquisition of the derivative broker licence, the fifth issued by the SECC, which allows it to operate and provide forex and CFD [contract for difference] trading services within the country,” stated the company’s press release. A CFD is a contract to exchange the difference in value of a financial instrument (the underlying market) between the time at which the contract is opened and the time it is closed.
“While derivatives trading is not new to Cambodia, the introduction of government regulation in the industry in recent years have led to safer trading activities, building an improved reputation for the local derivatives market,” said Blackwell. “The derivative broker’s licence instituted by the SECC early last year is geared at reining in unsafe and unethical trading practices, with the government watchdog ensuring that licensed companies adhere to the various policies intended to protect the consumer,” it added.
Avis Wang, managing director for Blackwell Global Cambodia, said that the company would bring the latest trading technology for the Cambodian market. “This translates to better trading conditions for our clients,” he said. “The general population in Cambodia has experienced an increase in affluence, and there are incrementally more demands for sophisticated standards which Blackwell Global is able to deliver, both in technology and education.”
Sok Dara, deputy director-general of the SECC could not be contacted for a comment. Derivatives are financial contracts that derive their value from an underlying asset. These could be stocks, indices, commodities, currencies, exchange rates, or the rate of interest. These financial instruments help investors make profits by betting on the future value of the underlying asset.
Lamun Soliel, director for market operations at the Cambodia Securities Exchange (CSX), told Khmer Times that the derivative business has “nothing to do” with the bourse her. “The SECC has provided derivative licenses to those companies operating outside of the CSX,” he said. “It’s another kind of business that provides services to clients who want to bet against the price movement of currencies, gold or oil.”
According to Blackwell, the brokerage is currently the only multi-regulated derivative broker holding this licence, in addition to licences from world-renowned regulatory bodies that include the UK’s Financial Conduct Authority, Cyprus Securities and Exchange Commission, FSP in New Zealand and the Securities and Futures Commission of Hong Kong.
In July, the Blackwell group signed a multi-year partnership with UK’s Everton Football Club to become their first official forex and brokerage partner. “Before clients decide to invest in the derivatives market, they have to seek a licensed broker,” said Mak Channdara, general director of FUGI Investment, an SECC-licenced derivatives broker. “If there are unlicensed brokers taking clients’ money, we will report them to the SECC. This market is still new in Cambodia and we will not allow a few bad apples to spoil it.”