Forex Magnates has learned that the group behind the retail broker FX Primus has executed the acquisition of Capital Market Services UK Ltd. (CMS Forex). The transaction has already received final approval from the United Kingdom Financial Conduct Authority (FCA) earlier this year.
Capital Market Services UK Ltd. was founded in 2008 as a brokerage firm in the retail, over-the-counter forex market. The firm expanded to the tier two institutional space in 2008 with strategic hires and the creation of a London office.
The firm that now took control of CMS is Prime Mantle Corporation Plc (PMC), a Republic of Ireland-based holding company with several assets in the financial services space. The most notable holding of PMC is the Mauritius based and New Zealand regulated global retail broker/dealer FX Primus.
The funds to fuel the takeover of CMS likely came from revenues of the retail business of FX Primus, which reported soaring volumes recently and has over 10,000 clients, mainly from Asia.
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The acquisition represents a significant move upstream for PMC in the forex industry, leveraging FX Primus’ global strong assets to further expand the group’s offering of institutional liquidity and prime-of-prime services in the FX, CFD and Metals markets.
The cost of the transaction has not been revealed yet, and it is still unclear at this stage if it includes CMS Forex’s US business and its trading platform, VT Trader 2.0. The acquisition can be understood as part of a bid by the Irish holding company behind FX Primus to go public.
Forex Magnates has learned, however, that no immediate changes in the management or directorship structure of CMS are expected to take place. This may suggest that the broker’s operations are expected to continue in its current form for the foreseeable future.
This step comes amid a growing number of industry players targeting the institutional fx space, either as new brands or existing retail brokers expanding their services. The ISAM hedge fund has just launched its FX broker, IS Prime, while on the retail side, FxPro was the latest to launch a re-branded website including FxPro Prime after purchasing Spot FX aggregator Quotix in September.
Another retail broker aiming at the institutional market is Axicorp, announcing in August it has become a prime-of-prime broker on KCG Hotspot. Forex Magnates believes that this trend will continue, and we will be seeing similar deals and launches in 2015 as well.