In particular, GAIN Capital confirmed to Finance Magnates that the firm is in the process of securing the Cypriot licence primarily to drive the company’s expansion in the European Union and part of its ongoing Brexit planning.
GAIN Capital provides both retail and institutional foreign exchange (forex) trading across the world. Already, the firm is regulated in the United Kingdom by the Financial Conduct Authority (FCA) under GAIN Capital UK Limited.
Brokers prepare for Brexit
The move from GAIN Capital is part of a larger trend – namely, brokers are ensuring they are licensed both within the UK, as well as in an EU country, to ensure their operations can continue uninterrupted following Brexit.
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As Finance Magnates confirmed only yesterday, Pepperstone, an Australian-headquartered FX broker is also in the process of securing a CySEC licence as part of its Brexit plans. However, there also appears to be another trend in the FX industry separate to Brexit, and this is brokers returning to MiFID II regulated jurisdictions.
GAIN Capital seeks to add another licence
Currently, GAIN Capital and its subsidiaries are regulated in eight jurisdictions across the world – in the United States, the firm is regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association, the FX broker is also regulated by the FCA in the UK, in Australia, Singapore, Japan, Canada and the Cayman Islands.
The move from GAIN Capital also comes as the company is in the process of being acquired by INTL FCStone. The deal as it stands will see INTL FCStone buy GAIN for $6 per share in an all-cash transaction. This represents approximately $236 million in equity value.
As Finance Magnates reported, in June, the company’s shareholders voted 71 per cent in favour of the acquisition. However, not all of the company’s directors are happy with the transaction.
In fact, three Directors were not in favour of the merger, as Peter Quick, Chris Sugden and Alex Goor, all voted against recommending that the stockholders adopt the Merger Agreement.