GAIN Capital seems to be very busy lately: only a few hours ago it announced that it won’t be acquiring LCG and now Forex Magnates sources tell us that it is acquiring the client base of FX Solutions which is exiting the US forex market. Official announcement from FX Solutions is expected later today or tomorrow.
This is not surprising given that FX Solutions has not done well in the US over the past 2 years and a month ago announced that it won’t be taking any new US customers which proved its intention to exit. City Index owns FX Solutions and finally decided to pull the plug on the losing US operation.
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And then they were 10 – according to our latest US forex traders profitability report in Q4 2012 there were only 11 forex brokers left in the US. After FXSol’s exit there remain only 10. FX Solutions had over 3,700 accounts – most of which will probably transfer to Gain. Gain also recently enjoyed the transfer of several accounts from GFT which thanks to the NFA unexpectedly exited the US market.
With just 10 forex brokers left in the US the options that are available to American forex traders become very limited. Combined with ridiculous rules like FIFO and the proposed credit card ban the industry will continue to shrink costing the US public thousands of jobs and billions in potential income. The silver lining here is that even though the US forex industry is shrinking at least NFA’s ‘revenue’ for the 2012 year grew 25%. Can the NFA continue growing amid downward trending US fx industry or is this a bubble?