Global Brokerage confirms completion of FXCM US assets sale to GAIN Capital

Maria Nikolova

In a brief SEC filing, Global Brokerage Inc says FXCM LLC completed the disposition of “substantially all of its United States-domiciled customer accounts”.

Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, has posted a filing with the US Securities and Exchange Commission (SEC), confirming the sale of substantially all of the United States-domiciled customer accounts of its FXCM LLC subsidiary to Gain Capital Holdings Inc (NYSE:GCAP).

According to the filing, the disposition was completed on February 24, 2017, that is, last Friday, when GAIN effectively transferred FXCM’s US retail FX accounts to Forex.com. GAIN has reported that the transition affected some 47,000 accounts with $142 million of assets.

There are a couple of interesting moments in Global Brokerage’s SEC filing. The first being the claim that “substantially all” of Forex Capital Markets LLC US assets were transferred to GAIN. In fact, we have no information on how many retail clients of FXCM LLC decided to abandon the broker and not to pursue a transfer of their accounts to Forex.com. Whether FXCM’s US introducing brokers made use of Forex.com’s offers is also unclear at this point. Even more interestingly – what is going on with FXCM’s institutional business in the United States? V3 Markets, for instance, was labeled as one of the non-core assets up for sale more than a year ago but we still have no information on whether it was sold or folded. FXCMPro’s website is still active, for that matter.

Talking of Global Brokerage Inc’s activity – its shares started trading under a new ticker on Monday, but the company’s website is globalbrokerage.info and the active section is ir.globalbrokerage.info, clearly targeted at providing information rather than attracting and working with clients.

Going back to the FXCM LLC – GAIN Capital deal, the latest SEC filing from Global Brokerage Inc notes that the purchase price for the assets will be paid in accordance with the terms of the asset purchase agreement, and is subject to adjustment based upon certain client trading activity. That is, GAIN is making no upfront payment and will pay a certain sum only if the transferred clients execute trades during the first 153 days after the closing of the account transfer.

More precisely, GAIN will pay:

  • $500 per account for each transferred account that first executes a new trade with GAIN during the 76-day period immediately following the closing of the account transfer;
  • $250 per account for each transferred account that (i) did not execute a new trade with GAIN during the Initial Period of 76 days and (ii) executes a new trade with GAIN during the 77-day period immediately following the last day of the Initial Period.

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