FXCM expects “significant cost savings” from US market exit

Maria Nikolova

The wind-down of FXCM US retail FX operations is set to generate substantial cost savings, according to the broker.

Further to last week’s reports that FXCM Inc (NASDAQ:FXCM) is leaving the US FX market, following regulatory action, and is selling its US retail FX client base to Gain Capital Holdings Inc (NYSE:GCAP), there has been a small update regarding the financial situation of FXCM’s US operations and the transfer.

Several hours ago, FXCM announced that none of the costs associated with its US retail Forex activities will be transferred to GAIN.

In fact, FXCM expects “significant cost savings” from the disposal of its US retail FX business. The broker quotes its metrics for the first nine months of 2016, which show that FXCM US incurred a $13.89 million net loss in the period, whereas the consolidated FXCM Inc continuing operations generated a net income of $125.97 million.

The announcement ends with an upbeat note on how the increased focus on the global business will improve profitability. This is a claim we’ve already noticed in comments by FXCM international branches (FXCM UK and FXCM France, for instance) in social media. Still, these claims have to materialize. Moreover, we have yet to see whether and how overseas regulators react to US regulatory findings regarding FXCM.

Concerning the GAIN-FXCM US deal, let’s stress that GAIN is making no upfront payment for the US clients of FXCM. The sum GAIN will pay depends on the trading activity of clients acquired.

Under the terms of the agreement, GAIN Capital will pay $500 for each transferred client account from which at least one new trade is executed during the first 76 calendars days of the 153-day period after the closure of the purchase agreement. The sum two times smaller – $250, for an account if at least one new trade is executed during the period from the 77th day through the 153rd day.

The deal needs a raft of regulatory approvals to proceed.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.


Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.