Trading Platforms: Full License | White Label | Grey Label

The MT4 and MT5 are exclusive products of MetaQuotes. For brokers who already have a wide customer base, they typically would attain a Full License platform from MetaQuotes directly. As MetaQuotes has made MT5 their exclusive product, the Full License MT4 is beginning to become a commodity, and there are a small group of people who are beginning to show interest on MT4 ownership transfers.

 

On Trading Platform White Labelling, we took reference from Line 5 of the bibliography on US NFA (National Futures Association) website. It defines “white labelling” as referring to:

Refers to the practice of leasing the right to place the lessee’s name on and market another firm’s trading platform as its own and then passing the trades through to the lessor. In the typical while labeling arrangement, the lessee’s customers do not have a contractual relationship with, and in fact may be unaware of, the firm that owns and operates the platform. For regulatory purposes, the lessee is the counterparty to the customer’s trades and the corresponding transactions with the lessor are separate transactions between the lessee and the lessor to hedge the lessee’s customer obligations. 

Nfa.futures.org, (2015). 9060 – COMPLIANCE RULE 2-36(e): SUPERVISION OF THE USE OF ELECTRONIC TRADING SYSTEMS [online] Available at: https://www.nfa.futures.org/rulebook/rules.aspx?RuleiD=9060&Section=9  [Accessed 30 Jul. 2020].

 

From a layman perspective, this means, the “White Label” trading platform is leased from someone who has the “Full Licensed” trading platform, and the lessee can have its own brand and Logo on the leased platform. Through the quote above, the remainder is self-explanatory.

 

As for “Grey Labels”, they are typically lessees of a “White Label” platform. Most grey label operators are early stage start-up brokerages, or early stage money managers who hope to gain access to clean institutional level liquidity from liquidity providers. The main difference is that they can only use the brand and logo of the existing platform. They use the brand and logo of the existing “White Label” trading platform. This means, if the owner of the white label platform leases out his/her trading platform, to a certain extent, they become involved in the conduct of the Grey Label operator. This has caused many platform owners to become very reluctant to lease their platforms to grey label operators. In the Mainland China market, there are different names for the “grey label”, they give them names like the “blue label”, or the “semi-white label”.

 

To find out more about how to attain a “Full License” Trading Platform, “White Label” Trading Platform, or the “Grey Label”, we will be glad to hear from you .

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