GAIN Capital to pay $500 per each FXCM US client account


GAIN Capital to pay $500 per each FXCM US client account, according to the official filing. However, there are some specific conditions in the agreement.

10 February, AtoZForex Following the latest developments in the US Retails Forex market, today, AtoZForex reports on the details of the GAIN Capital FXCM US clients acquisition.

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GAIN Capital to pay $500 per each FXCM US client account

Earlier this week, we have reported that the US Commodity Futures Trading Commission (CFTC) has published an order in relation to the Forex Capital Markets, LLC (FXCM). The regulator has settled charges with the Forex brokerage firm for $7 million in a civil monetary penalty. The fine for FXCM emerged as a penalty for engaging in fraudulent and misleading solicitations. Moreover, CFTC has ordered FXCM and CEO Drew Niv to withdraw from the CFTC’s regulation.

In the wake of the announcement, GAIN Capital has signed a definitive deal with FXCM to purchase the Forex broker’s US clientele. The recent SEC report has disclosed the financial details of the asset purchase agreement with Gain Capital Holdings Inc. According to the report, the FXCM has agreed to sell all of its US Retail Forex clientele to the Gain Capital. As per the disclosed financial terms of the agreement, gain Capital has agreed to pay FXCM Inc a maximum of $500 per each US Retail Forex client. The transfer period will last 153 days, where it is assumed that the FXCM clients stick and trade with Gain Capital after the deal finalization.

According to the official filing, the deal between FXCM and Gain Capital has been performed on the CPA (cost-per-acquisition) basis. To be more specific, the Gain Capital has agreed to pay $500 for each account of FXCM given that its owner will perform at least one new trade in the first 76 days of the 153-day period. Moreover, FXCM will receive additional $250 per client in case the transferred account will make a new trade during the remaining period after first 76 days till the end of 153-day time limit.

How much will FXCM get in total?

FXCM claims it has nearly 175,000 active clients globally, where this includes any client that executed a trade in the past year. Based on the online reports, FXCM’s US clientele accounts for approximately $53 billion in monthly volume. This covers roughly 20% of FXCM’s overall retail Forex volume. This would imply that about 35,000 potential clients will go to Gain Capital.

In the best case scenario, if all of the transferred clients will execute a trade with Forex.com, both in the first 76 days and the remaining period, FXCM will have $750 per each of them. This accounts for the total of $26.3 million. Yet, market observers believe that such scenario is unlikely to happen. This is due to the fact that many of these 35,000 active clients have not been very active in the past few months. Moreover, not all of them will be transferred to Forex.com and not all of the will trade in both the outlined periods.

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