GAIN Capital enters into definitive agreement for acquisition of FXCM’s clients in US

Maria Nikolova

GAIN Capital confirms that it has entered into a definitive agreement to take over the client base of FXCM in the US.

Gain Capital Holdings Inc (NYSE:GCAP) has provided an update regarding its discussions with FXCM Inc (NASDAQ:FXCM) regarding the acquisition of the clients base of FXCM’s US operations. GAIN has just announced that it has entered into a definitive agreement with FXCM on the acquisition and that FXCM’s US regulated business will be transferred to GAIN Capital’s retail trading service, FOREX.com.

invast pureprimeThe transaction, the financial terms of which are not disclosed, is set to close before the end of February 2017, subject to regulatory permissions.

GAIN initially unveiled it was in talks with FXCM early on Tuesday, following the announcements by US regulators that banned FXCM, its CEO Drew Niv and senior Managing Director William Ahdout from the US market. The rough measures were imposed after the regulators discovered that during several years, the broker traded against its customers while claiming to use a no dealing desk model.

FXCM is exiting the US retail FX market, with the move translating (amid other things) into the lay-offs of 150 employees, or approximately 18% of FXCM international workforce.

Earlier today, FastMatch, in which FXCM owns a stake, has announced board changes. The financial technology company said that former directors Drew Niv and William Ahdout are replaced by Brian Friedman, President, and Jimmy Hallac, Managing Director, of Leucadia National Corp. (NYSE:LUK).

More importantly, FastMatch reiterated that “FXCM is a passive minority owner of FastMatch. FastMatch operates as a completely independent entity of FXCM with no operational dependencies between two firms”. The stance is in tune with FinanceFeeds’ view that FastMatch will try to distance itself from FXCM.

The GAIN Capital – FXCM deal is set to add weight to Gain’s presence in the United States. GAIN is regulated in eight jurisdictions, with approximately 140,000 customers. According to GAIN’s latest announcement, for the three months to the of December 2016, average daily volume from customers of FXCM’s US operations was around $2.4 billion.

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