In this article, we start by outlining the main execution models and how they affect a broker’s access to market liquidity. Next, we discuss how to choose and negotiate with a liquidity provider — covering pricing, regulation, location, measurable execution quality, and key considerations for the liquidity bridge. We then outline the main types of liquidity sources and explain why startups often face barriers to accessing top-tier banks directly. Finally, we present real-world onboarding minimums from selected providers to set clear expectations for initial deposit requirements.
Two Ways to Execute Client Trades
When a brokerer decides how to process client orders, it adopts one of two execution models: the Dealing Desk (DD) model or the No Dealing Desk (NDD) model, also known as Straight-Through Processing (STP).
Dealing Desk
In this model, the broker operates an internal trading desk that handles all client orders. Instead of sending trades to the external market, the broker decides how to manage them inside the company — for example, by matching buy and sell orders between clients or by taking the opposite side of the trade.
This provides full control over execution flow but also creates a potential conflict of interest. It can lead to wider spreads as the broker protects against market volatility or losses. Moreover, because prices are generated within the broker’s own system, fast-moving markets may also result in re-quotes — where a trade is executed at a new, updated price instead of the original one.
No Dealing Desk
In this model, the broker receives quotes directly from a liquidity provider and passes client orders to that provider for execution. The broker does not trade against clients but acts as an intermediary, earning a markup or commission on trades. This model offers tighter spreads, lowers counterparty risk, and aligns the broker’s interests with those of its clients.
For a startup broker, adopting the NDD model often inspires greater client trust, as the broker’s profits come from trading activity rather than client losses.
How to Connect to a Liquidity Provider
Connecting your trading platform to a liquidity provider is a multi-stage process that involves important technical, financial, and operational steps.
1) You need to choose the liquidity provider that best meets your needs.
Think about what matters most to your business — for example:
- Asset coverage. If you position yourself as a crypto broker, an LP offering a wide range of crypto pairs will be the best choice.
- Capital requirements. If the initial deposit requirement is your main concern because you’re at an early stage, focus on providers with lower entry thresholds.
- Execution speed. If execution speed is your priority, look for an LP whose servers are located in the same region or city as your trading servers to achieve the fastest possible execution.
- Regulatory status. If you’re not a regulated broker, exclude LPs that work exclusively with regulated entities.
- Legal alignment. If you operate under specific legal or regional restrictions, verify that the LP’s licensing and KYC/AML policies comply with your business model.
2) Negotiate with the liquidity provider on the following points:
- Pricing structure. Ask about the pricing model and whether you are paying only a spread markup or if there are fixed monthly or annual fees, minimum trading volumes, or hidden costs.
- Entry conditions. Negotiate acceptable entry capital and monthly minimums that match your current business scale.
- Execution quality. Request detailed latency, fill-rate, rejection-rate, and slippage statistics, especially during high-volatility events.
- Capital management. Confirm whether the initial deposit is refundable, how margin calls are managed, and how credit utilisation is calculated.
- Liquidity validation. Make sure the liquidity feed is genuinely live and not just a marketing quote by testing order fills under both low and high-volume conditions.
- Transparency. Ask about reporting and transparency, including whether you will receive detailed trade logs, volume summaries, and execution statistics for performance monitoring.
- Reliability. Check the LP’s backup systems to understand how quickly trading can resume in case of outages or server failures.
3) Choose the bridges that can connect your liquidity provider to your trading platform.
Compare the conditions offered by different bridge providers, such as:
- Cost structure. For example, check whether the provider offers any discounts for startup brokers, such as a free setup or a fixed volume fee during the first few months of bridge usage.
- Aggregation options. For example, check whether the bridge supports multi-venue routing so you can connect to more than one LP for backup and better aggregation opportunities. Also assess the availability of advanced aggregation, which splits the order volume across multiple LPs according to available price levels, in addition to simple aggregation, where the bridge selects the best price among active liquidity providers and sends the full order to that LP.
- Scalability options. For example, find out whether the bridge allows you to combine straight-through processing with a dealing desk model in the future as your business expands.
- Risk management features. For example, look for an emergency failover for trading instruments system that automatically switches to another available liquidity provider if a price for a symbol isn’t updated for more than 30 seconds.
Types of Liquidity Providers
Tier 1 liquidity providers (top-tier banks)
Large global banks such as J.P. Morgan, Citi, UBS, Barclays, and Deutsche Bank that make markets directly in the interbank FX and securities markets — they create raw liquidity and set base pricing used across the financial system.
Prime brokers
Divisions of Tier 1 banks that lend credit and provide access to the interbank market — they don’t quote prices themselves but enable institutional clients (hedge funds, large brokers) to trade using the bank’s credit lines and clearing infrastructure.
Prime-of-prime liquidity providers (PoP)
Non-bank or smaller financial firms that hold accounts with Prime Brokers and repackage Tier 1 liquidity to clients who cannot get direct prime access, for example retail brokers, small hedge funds. They bridge the gap between the interbank level and the retail market.
Tier 2 liquidity providers
Effectively the same layer as Prime-of-Primes, these are secondary aggregators that source liquidity from multiple PoPs and sometimes exchanges — they redistribute that combined feed to retail brokers, platforms, or white-label partners.
Exchanges
Regulated centralized venues such as CME, NYSE, Binance where buyers and sellers trade standardized instruments in a transparent order book, acting as both a marketplace and a deep liquidity source for listed assets.
Why Startup Brokers Have Limited Access to Top-Tier Liquidity Providers
While the concept of connecting to a Tier-1 bank or a deep inter-bank liquidity pool sounds straightforward, in practice there are structural barriers for startup and small brokers.
High minimums and credit requirements
Tier 1 liquidity providers work directly with large institutions or funds that can commit very high minimum deposits, meet margin/credit conditions, and generate substantial trading volume. For many startup brokers, meeting those thresholds is financially prohibitive.
Volume and risk profile
Tier-1 LPs expect consistent flow and risk profile from the broker. If the broker’s client base is thin, fluctuating or untested, the LP may view it as higher risk and may refuse or impose penal terms: wider spreads, higher mark-ups.
Technology and integration burden
Accessing top-tier liquidity often demands robust connectivity, performance monitoring, and infrastructure to meet the SLAs expected by the LP. Without this, you may get slower fills or higher re-quote risk.
Regulatory & counterparty risk considerations
Established LPs often require proof of regulation or compliance oversight on the broker’s side, as any regulatory weakness introduces risk. For startups still building licences or jurisdictional frameworks, this can be another hurdle.
Hence, many startup brokers first connect to Prime-of-Prime liquidity providers or Tier 2 liquidity providers who then provide access to Tier 1 pools.
Example Prices for Liquidity
Many top LPs like Finalto, Sucden, Saxo, don’t publish a fixed “startup broker deposit” and negotiate based on jurisdiction, credit, and expected volumes — so the figures below are the clearest publicly stated minimums.
As of October 2025, the following example prices apply:
- FXCM Prime which is a PoP allows customers with a minimum balance of over $250,000.
- LMAX Digital, spot crypto exchange, — $100,000 or crypto equivalent minimum deposit or crypto equivalent).
- LMAX Global, Tier 2 liquidity provider, — $10,000 minimum initial deposit to open an account.
