Exclusive: StoneX Integrates Gain Capital's FX Brand in the UK

StoneX, formerly known as INTL FCStone, is phasing out its FX business under the Gain Capital brand in the UK, which was part of the plans to restructure its core activities after it acquired the firm in 2020.

The US-based financial group is winding down the Gain entity to merge it into StoneX and use the capital productively elsewhere, Finance Magnates has learned.

According to regulatory filings, Gain Capital UK Limited has reduced its share capital from nearly £87 million to around £1 million. The writedown occurred on February 24.

The FCA-regulated company, which has a dozen trading names/brands in the UK, including Forex.com and City Index, is regulated as a full scope €730k IFPRU Investment Firm. This requires Gain’s UK business to maintain the minimum required regulatory capital above £1 million.

We understand, based on info from sources familiar with the matter, that Gain Capital UK is merely restructuring its share capital and reserves to accommodate the planned back-end changes to prepare for the entity’s winddown.

As such, reducing the regulatory capital seems to be a standard step in the larger corporate integration process for StoneX's retail FX business in the UK.

The Regulatory Filing Further Reads That:

Pursuant to section 288 of the Companies Act 2006, Gain Capital Holdings passes the following written resolutions:

1 the share capital of the Company be reduced from £86,948,098.14, divided into 8,694,809,814 ordinary shares of £0.01 each (of which have been issued and are fully paid) to £999,903.12861, divided into 8,694,809,814 ordinary shares of £0.000115 each, by reducing the nominal value of each issued share from £0.01 to £0.000115; and

2 the share premium account of the Company be cancelled.

The move to consolidate its City business comes as Gain Capital has applied for a regulatory license from the Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) just ahead of the Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term transition period expiry.

Concerning the financials of Gain Capital UK Limited, the latest reports released in September 2020 showed that the broker lost £11.36 million for the year ended December 2019. This compares to the £19.81 million profit the online trading provider recorded in the previous financial year.

However, this should have changed as most online brokers had strong underlying performance in the business throughout 2020, bolstered by the coronavirus-induced volatility.

Last year, StoneX Group has completed the acquisition of GAIN Capital Holdings, which in July 2020 reported its last financial results as an independent business.

Sean M. O’Connor, CEO of StoneX Group, told Finance Magnates in a previous interview that they look to leverage Gain’s highly digitized and efficient on-ramp for smaller customers, and he thinks they can deploy that on-ramp throughout other businesses in order to make their goal of becoming a global institutional grade financial network a reality.