StoneX has liquidated its UK Forex brand Gain Capital which is part of the company’s plan to restructure its core business in 2021.
March 3, 2021 | AtoZ Markets – StoneX, formerly INTL FCStone, is phasing out its foreign exchange business under the Gain Capital brand in the UK. It is part of the company’s plan to restructure its core business following the acquisition of the firm in 2020.
Why is StoneX Liquidating UK’s Gain Capital?
AtoZ Markets has learned that the US-based financial conglomerate is closing the company Gain and merging its activities with StoneX. Thus, the forex broker wants to optimize the use of capital.
Capital UK Limited has cut its share capital from nearly £87 million to around £1 million, according to regulatory filings. The write-off took place on February 24.
The FCA-licensed company, with a dozen trade names and brands in the UK, including Forex.com and City Index, is regulated as a full-fledged investment firm IFPRU with a market capitalization of €730,000. To do this, UK business Gain must maintain a minimum regulatory capital requirement above £1 million.
Based on the information provided by sources familiar with the circumstances of the case, Gain Gain UK is simply restructuring its share capital and reserves to accommodate planned internal changes and prepare for company closure.
Thus, the reduction in regulatory capital is a necessary step in the corporate integration of StoneX’s UK retail forex business.
The decision to consolidate the City business came after Gain Capital applied for a license from the Cyprus Securities and Exchange Commission (CySEC) shortly before the end of the Brexit transition period.
The latest financial reports from Gain Capital UK Limited released in September 2020 showed that the broker lost £11.36 million for the year ended December 2019. By comparison, the online trading service provider earned £19.81 million in the previous fiscal year.
However, most brokers are on the rise in 2020, as the global quarantine and coronavirus crisis has triggered increased volatility and attracted many new retail investors to the markets.
Last year, StoneX Group completed the acquisition of GAIN Capital Holdings. In July 2020, the company last reported its financial results as an independent business.
Sean M. O’Connor, CEO of StoneX Group, told Finance Magnates that they are committed to leveraging digital and efficient Gain technology to attract smaller customers. He believes they can deploy this technology to other companies and thus move closer to their goal of becoming a world-class institutional financial network.
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