GAIN CEO States Increased Regulation a Long-Term Positive for Industry

Glenn Stevens predicts further consolidation around a smaller number of larger firms.

GAIN Capital’s (NYSE:GCAP) CEO Glenn Stevens has released additional comments regarding the recent regulatory fallout from this week that effectively upended the FX market in the United States.

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Earlier this week, GAIN Capital (NYSE:GCAP) entered into a definitive agreement to buy the US client book of FXCM (NASDAQ:FXCM) following its ban from the National Futures Association (NFA).

The move has massive ramifications for the US FX market, given FXCM’s market share domestically, which previously was calculated at 36.0%. The impending acquisition of the US client portfolio of FXCM will effectively make GAIN Capital the biggest brokerage in the country.

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According to Stevens in a statement on the role of regulators in the US: “GAIN is in favor of measures which serve to enhance consumer protection, safeguard customer assets, increase transparency and make brokers more effective in meeting customer needs.”

“GAIN believes that increased regulation will have a long-term positive impact on the industry and will lead to further consolidation around a smaller number of larger firms. With GAIN’s size, scale and global reach and experience with regulatory regimes across the world, as well as our track record as an industry consolidator, we are well-positioned for the future,” he added.

The comments come during an already ongoing industry contraction in the US, which has seen a field winnowed down to only a handful of FX brokers due to regulatory constraints imposing strict capital requirements, among other obligations.

In light of this, the Trump administration has shown a willingness to dismantle Dodd-Frank, which could eventually have major consequences for brokers operating domestically. However, this process will be difficult to undergo logistically, and so it is unlikely to foster any other dramatic shakeups in the FX market in the foreseeable future.

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