Exclusive: GAIN Capital Transfers $142m Worth of Client Assets from FXCM

GAIN Capital’s CEO Glenn Stevens elaborates on the transition in an exclusive interview with Finance Magnates.

GAIN Capital Holdings successfully transferred over the weekend more than 47,000 accounts with total assets of about $142 million. The company’s CEO Glenn Stevens shared with Finance Magnates some details about the transition and other hot market topics in an exclusive interview.

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After the transition, the FOREX.com brand of GAIN Capital has over 70,000 U.S. customer accounts on its books. The firm stated in an official announcement that the brokerage now has over 185,000 clients worldwide with over $1.5 billion worth of assets.

Speaking with Finance Magnates, Glenn Stevens, the CEO of GAIN Capital,  said: “We were able to smoothly migrate a sizable amount of customers under the watchful eye of our U.S regulators  over the weekend, which is quite an achievement. The process required transferring customers’ documentation, funds, open positions, and P&L.  The migration started Friday evening and teams worked through the weekend so that all the transferred clients were up and running for the Sunday open at 5pm ET.”

“We had a template to build on with past acquisitions including DBFX, CMS, FX Solutions, GFT and CityIndex, where we acquired a lot of experience. Our call centers were busy, but we were well staffed over the weekend. The customers that we transferred seemed to have a very positive experience.”

A Smooth Transition

Was it more complex to transfer accounts to your market making operation from FXCM’s offering?

The customer’s trading experience with us is very straightforward.  Our customers trade directly on our live bid and offer prices.  Once the customer’s trade is executed, we then hedge our aggregate risk into the interbank market.  Over 95% of our daily trading volume is hedged. There is no effect on a customer’s experience – we execute the customer’s transaction first and then hedge either directly into a multi-price ECN like GTX or with one of our bank liquidity providers.

In terms of supporting this many clients, there was no difference with a very busy day on the market like Brexit or the US election. We had a big spike in client positions on Friday into the weekend and we handled the flow the same way. We rely on automated processes to handle order execution, so from a systems perspective we are absolutely ready for the higher client volumes as a result of this transaction.

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FXCM deal timeline

Can you elaborate on the timeline of the deal with FXCM?

We were in discussions with FXCM and the regulator in advance of the announcement made by the Commodity Futures Trading Commission (CFTC) on the 6th of February. Our primary objective was to secure a smooth transition for clients without disrupting their trading activity.

It took us less than ten days to decide on the acquisition. What was helpful for us was having a track record and being able to ask the right questions and create a business case in sync with the regulators.

How would you alleviate the concerns of US traders about lack of enough competition in the retail FX market?

One competitive alternative is futures – many of the products that we offer can be traded on an exchange. Even though there is a lack of broad based providers, there is a new rule that is coming out at the end of March that allows clients to access a report which provides time and rates on their fills, which is quite a substantial development when it comes to providing transparency about execution quality and ensuring a level playing field for retail clients.

The environment is pretty open and honest – while the number of providers is limited, the conditions in which customers are operating in are more transparent than ever.

Have you considered acquiring other assets from FXCM?

If there is interest by the owners of FXCM, Leucadia and Jefferies, to raise some capital or sell other assets we would consider.

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