GAIN Capital

GAIN Capital Holdings, Inc.
Public
Traded as NYSE: GCAP
Industry Financial Services
Founded 1999 (1999)
Headquarters Bedminster, New Jersey, United States
Key people
 Glenn Stevens (CEO)
Samantha Roady
(President, Retail)
Nigel Rose (CFO)
Jeff Scott (COO)
Mike Lear (CIO)[1]
Brands FOREX.com, GTX, City Index Group, Galvan Research and Trading, Daniels Trading
Services Forex trading, CFDs, spread betting, shares trading, FX ECN, futures trading
Number of employees
 800+ [1][2]
Website www.gaincapital.com

GAIN Capital Holdings, Inc. is an international financial services company headquartered in Bedminster, New Jersey.[1] The company has specialized in online trading since its founding in 1999, and among other services it provides market access and trade execution services in foreign exchange, contracts for differences (CFDs) and exchange-based products to retail and institutional investors.[1] The company, which went public in 2010 on the NYSE,[3] also provides services to institutions such as B2B liquidity.[1] GAIN Capital operates its own electronic communications networks, including GTX for institutions,[4] FOREX.com for currency traders of all experience levels,[5] and City Index for CFD trading and spread betting.[6]

GAIN Capital has acquired a number of companies since 2010, and among its current brands are the futures provider Daniels Trading,[7] the advisory service Galvan Research and Trading,[8] and the spread betting company City Index Group.[6] With customers in 140 countries,[9] GAIN Capital is regulated in seven jurisdictions including the United States, the United Kingdom, Canada, Australia, Hong Kong, Singapore and Japan.[9] The company had pro forma revenue of USD $539 million and $1.1 billion in customer assets in 2015,[10] and that year Fortune named GAIN Capital the 44th fastest growing company in the United States.[10]

History

Founding and diversification (1999-2007)

GAIN Capital Holdings, Inc. was founded in 1999 in Bedminster, New Jersey as GAIN Capital Group, with GAIN Capital established as the company's flagship service catered to "professional forex traders, money managers and experienced forex day traders."[5] By the beginning of 2004, GAIN Capital had clients in around 80 countries with monthly trade volume exceeding $35 billion per month,[5] and that year Deloitte ranked GAIN Capital the fastest growing technology company in New Jersey.[2] In January 2004 GAIN Capital launched FOREX.com, an online portal intended to support customers trading over the foreign exchange market (forex). The website facilitated trading and provided educational and support materials,[5] with GAIN Capital's CEO explaining it was catered to "individuals who are comfortable making their own investment decisions, but have little or no experience trading foreign currencies."[5] GAIN Capital was placed on Inc.'s list of the 500 fastest growing companies in the United States in 2006, the second year it placed.[2] In 2007, GAIN Capital's five year revenue growth rate equalled 800%.[2]

IPO and expansion (2008-2013)

After filing with the U.S. Securities and Exchange Commission in August 2009,[3] GAIN Capital went public on December 15, 2010[11] when it floated 35% of its shares on the New York Stock Exchange.[11] Although Gain had projected raising up to $125 million with the IPO, the sum was later scaled back.[3] In May 2008, GAIN became aware of a China Banking and Regulatory Commission prohibition on forex trading firms providing retail forex trading services to Chinese residents in China through the internet without a permit,[12] resulting in GAIN pulling out of China for two years.[13] In May 2011, GAIN Capital received regulatory approval to open a representative office in Beijing,[14] at which point the company also had branches in New York City, England, Australia, Hong Kong, Japan, Singapore, and South Korea.[13] On April 21, 2011, Deutsche Bank announced it would exit the retail forex trading business and sell its dbFX client database to GAIN Capital, with its client portfolio to be transferred to FOREX.com.[15] The transfer was completed on May 17, 2011.[16]

In September 2012,[17] GAIN Capital entered the futures brokering market when it acquired Open e Cry (OEC)[8] from a subsidiary of the Charles Schwab Corporation.[17] At the time of the acquisition, OEC held approximately $104.8 million in customer assets, with around 8,300 open accounts.[17] At the end of 2012 GAIN Capital launched the contract for difference (CFD) platform TRADE[8] and continued to operate GAIN GTX, an independent FX ECN for financial institutions and hedge funds.[17] GAIN Capital also continued to operate AIN Securities, Inc., a broker-dealer licensed in the United States.[17] GAIN Capital purchased the forex and derivatives trading business Global Futures and Forex, LTD (GFT) in September 2013.[6] GAIN Capital's CEO stated that "we intend to use GFT's broad product offering, innovative tools and educational capabilities to further strengthen our competitive position."[4]

Continued acquisitions (2014-2015)

See also: City Index

GAIN Capital announced it would acquire Global Asset Advisors (GAA) through a majority investment in March 2014.[7] Based in Chicago, GAA was known for operating the futures brokerage firm Daniels Trading.[7] Also that month, GAIN Capital acquired a majority share in Top Third AG Marketing, a company that advertised "options-based hedging strategies to manage the risks of producing agricultural products."[7] As part of its continued push to expand beyond retail forex offerings,[8] in July 2014 GAIN Capital acquired the CFD advisory services firm Galvan Research,[18] which was based in the United Kingdom.[8] Although Galvan retained its branding and independent identity, GAIN Capital's CEO Glenn Stevens stated that the acquisition gave GAIN Capital "a solid foundation on which to build a comprehensive advisory service for our clients."[8]

In October 2014, GAIN Capital reported quarterly revenues 69 percent higher than the year previous.[6] Also that month the company announced it would acquire UK-based rival City Index for $118 million, boosting its CFD business and expanding its Forex business in the UK[6] and Asia.[6] With the acquisition completed in April 2015,[19] the Financial Times reported that "the deal will create a global company servicing 235,000 retail customers in more than 180 countries with annual trading volumes of more than $3 trillion."[6] Assets for the combined companies was estimated to equal over $1.1 billion.[19]

Recent developments (2015-present)

In January 2015, the Wall Street Journal reported that GAIN Capital Holdings had generated profits from recent volatility with the Swiss Franc, with GAIN Capital stating it had avoided losses by raising "its margin requirements, or the necessary funds clients must have to back their bets in the event of major volatility, for trading the euro against the Swiss franc to 5% on Sept. 26, 2014." The Wall Street Journal explained that the move helped GAIN Capital "stay afloat and post gains while competitors around the world tumbled."[20] In September 2015, Fortune named GAIN Capital Holdings, Inc. at No. 44 on its list of the 100 fastest growing companies in the United States.[10] At that point, GAIN Capital had pro forma revenue of $539 million and $1.1 billion in customer assets.[10]

As of 2016, GAIN Capital had 140,000 retail traders' customers across 180 countries and continued to be listed on the NYSE.[2] On February 10, 2016, GAIN Capital announced it would debut GAIN Capital Payments Ltd., an international money transfer business, later that spring. The business launched under the ForeignExchange.com brand name, with GAIN Capital predicting the service would "save users an average of 60 – 80 percent in fees when compared to typical bank pricing."[21] After GAIN Capital's GTX trading portal reported an increase of trading by 40 percent in June 2016,[22] on June 24, 2016, it was reported that GAIN Capital Holdings, Inc. had not been adversely affected by the Brexit decision.[23]

Facilities

GAIN Capital Holdings, Inc. services customers in 180 countries[2] and is regulated in seven jurisdictions globally, including the United States, the United Kingdom, Canada, Australia, Hong Kong, Singapore and Japan.[9] Headquartered in Bedminster, New Jersey,[17] GAIN Capital has affiliate offices in London, Sydney, Hong Kong, Tokyo, Beijing,[9] and Seoul,[17] as well as the country of Singapore.[9]

Brands and services

Originally focused on facilitating online trading over the foreign exchange market (forex), in 2000 GAIN Capital also began offering asset management services.[24] GAIN Capital currently focuses on markets such as forex, commodities, equities, indices, and rates, also providing "institutions such as banks, brokers, hedge funds and professional traders with liquidity and technology solutions to trade on over 12,500 leveraged OTC and exchange-traded markets."[25] Specifically, GAIN Capital allows retail and institutional clients to speculate on global foreign exchange markets in what is known as "margin forex trading."[9]

The company describes its products as encapsulating forex, CFDs, spread betting, options, futures, and DMA FX.[25] It names the "solutions" it provides as including "introducing brokers," white label, MT4 solutions, managed accounts, ECN trading, and liquidity and API trading.[25] GAIN Capital currently operates multiple forex and contract for difference (CFD) trading brands and electronic trading platforms,[17] including its own proprietary FOREX.com, City Index, and GTX.[26] It also provides customers with access to platforms by other developers, such as MetaTrader 4.[9]

Brands and subsidiaries operated by GAIN Capital Holdings, Inc.
Name Focus Description
FOREX.com Online FX and CFD trading[2] Launched in 2004, this online trading platform is intended to facilitate forex and multi-asset trading on a global level.[26] At its launch, FOREX.com incorporated a "protective margin policy" to limit risk on deposited funds and stop negative balances.[5]
GTX Electronic communications network GAIN Capital owns and operates GTX, an independent FX electronic communications network catering to hedge funds and other institutions.[4][17] GAIN Capital states that GTX "features advanced algorithmic trading capabilities, pricing aggregation, and order management and routing tools."[26] As of 2013, GTX managed $208.2 million in client assets.[4]
City Index Online CFD trading and spread betting[2] Acquired by GAIN Capital in 2014, City Index was founded in 1983 and according to the Financial Times is one of the oldest spread betting companies in the United Kingdom.[6]
Galvan Research and Trading Research services and CFD advisory[2] GAIN Capital owns an advisory CFD business, Galvan, which it acquired in 2014.[8] The company is based in the United Kingdom[8] and retains its branding and independent identity.[8]
Daniels Trading Self-directed and advisory futures trading[2] GAIN Capital owns and operates Daniels Trading, a futures provider[7] in Chicago that provides access to around 30 global exchanges.[2]

Awards and nominations

The following is an incomplete list of awards and accolades for GAIN Capital:[2]

  • 2001: Global Finance - "Best Online FX Trading Platform"[2]
  • 2001: Forbes - "Best of the Web"[2]
  • FX Week - No. 1 Currency Forecaster (first non-bank institution to win)[2]
  • 2002: Eastern Technology Council - "Start Up Company of the Year"[2]
  • 2002: New Jersey Technology Council - "Growth Company of the Year"[2]
  • 2004: Deloitte Technology - Fast 50 'Rising Star' Company[2]
  • 2005: Deloitte Technology - Fastest Growing Forex Company in North America[2]
  • 2005: Inc. - 500 Fastest Growing Private Companies List[2]
  • 2005: Deloitte Technology - No. 1 Fastest Growing Company in New Jersey[2]
  • 2006-2007: Technical Analysis of Stocks and Commodities - Semi-Finalist for Best Forex Brokerage[2]
  • 2006-2009: FXWeek e-FX Awards - Finalist: Best Retail Platform[2]
  • 2007-2008: Inc. - No. 41 on Inc. 5000 Fastest Growing Private Companies List[2]
  • 2008: Deloitte - Fastest Growing Firms in North America[2]
  • 2008-2009: Profit & Loss - Best Retail Platform[2]
  • 2008-2009: Technical Analysis of Stocks and Commodities - Finalist for Best Forex Brokerage[2]
  • 2010: FT Investors - Best Forex Platform[2]
  • 2010: Middle East Online Trading Summit Awards - Best Retail Services Provider[2]
  • 2010, 2013: Forex Expo Awards - FOREX.com named Best US Forex Broker[2]
  • 2010, 2012: Shares Magazine - Best FX Broker[2]
  • 2011: World Finance - Best Forex Broker USA[2]
  • 2011: Middle East Forex Trading Expo and Conference - Best Execution House[2]
  • 2011: MoneyAM Awards - Best Online FX Provider[2]
  • 2012: UK Forex Awards - FOREX.com named Best Forex Retail Trading Platform[2]
  • 2012: Saudi Money Expo - Best Arabic FX Platform[2]
  • 2013: FT and Investors Chronicle Investment Awards - Best Forex Provider[2]
  • 2014: Shares Magazine - City Index named Best Spread Betting Provider[2]
  • 2015: UK Forex Awards - City Index named Best Forex Platform[2]
  • 2015: UK Online Personal Wealth Awards - City Index named Best Education/Resources Provider[2]
  • 2015: UK Online Personal Wealth Awards - City Index named Best CFD Provider[2]
  • 2015: Shares Magazine - City Index named Best Spread Betting Service[2]
  • 2015: Fortune - 100 Fastest Growing Companies 2015 List[10]

Regulatory matters

As of 2016 GAIN Capital and its subsidiaries were regulated in seven jurisdictions, including Commodity Futures Trading Commission and National Futures Association in the United States and the Investment Industry Regulatory Organization of Canada. Overseas, GAIN Capital is regulated by the Financial Conduct Authority of the United Kingdom, the Australian Securities and Investment Commission, the Monetary Authority of Singapore, the Securities and Futures Commission of Hong Kong, and the Financial Services Agency of Japan.[2] In October 2010, GAIN Capital was fined $459,000 by the self-regulatory National Futures Association for allegedly engaging in margin, liquidation and price slippage practices that failed to benefit customers.[27][28] GAIN Capital agreed to refund affected customers the amount of negative slippage on trades placed between May and July 2010.[27][28] GAIN Capital estimated that the affected trades represented "approximately .05% of all customer transactions during the period."[27]

Further reading

See also

References

  1. 1 2 3 4 5 "About GAIN Capital". gaincapital.com. Retrieved 12 October 2015.
  2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 "About". GAIN Capital. Retrieved 2016-07-20.
  3. 1 2 3 "GAIN Capital (Forex.com) goes public with IPO, price below range". International Business Times. December 15, 2010. Retrieved 21 December 2010.
  4. 1 2 3 4 "GAIN Capital Completes Acquisition of GFT". GAIN Capital. September 24, 2013. Retrieved 2016-07-20.
  5. 1 2 3 4 5 6 "GAIN Capital Group Launches FOREX.com". GAIN Capital. January 22, 2004. Retrieved 2016-07-20.
  6. 1 2 3 4 5 6 7 8 Agnew, Harriet (October 31, 2014). "Spencer sells City Index to GAIN Capital". Financial Times. Retrieved 2016-06-29.
  7. 1 2 3 4 5 "GAIN Capital expands futures business with purchase of majority interest in global asset advisors and Top Third AG Marketing". marketwatch.com. Retrieved 12 March 2014.
  8. 1 2 3 4 5 6 7 8 9 "GAIN Capital acquires Galvan Research as it aims to boost cfd offering". Finance Magnates. Retrieved 4 July 2014.
  9. 1 2 3 4 5 6 7 "About GAIN Capital". gaincapital.com. Retrieved 13 October 2015.
  10. 1 2 3 4 5 "GAIN Capital Holdings, Inc. named to Fortune's 100 Fastest Growing Companies 2015 List". GAIN Capital. September 4, 2015. Retrieved 2016-07-20.
  11. 1 2 "GAIN Capital: Regulatory Problems Affect Revenue, Margins". seekingalpha.com. December 15, 2010. Retrieved 21 December 2010.
  12. ↑ Zinsli, Christopher (October 5, 2010). "GAIN Capital's Kafkaesque Moment In China". Wall Street Journal. Retrieved 2016-07-20.
  13. 1 2 Greenberg, Michael (November 5, 2011). "GAIN Capital Receives Regulatory Approval to Return to China". Finance Magnates. Retrieved 2016-07-20.
  14. ↑ "GAIN Capital Receives Regulatory Approval in China; Announces Plans for Beijing Office". GAIN Capital. May 11, 2011. Retrieved 2016-07-20.
  15. ↑ "Deutsche Bank sells dbFX to Gain Capital". FX Week. 21 April 2011.
  16. ↑ Source: Euromoney FX survey FX survey 2011: The Euromoney FX survey is the largest global poll of foreign exchange service providers.'
  17. 1 2 3 4 5 6 7 8 9 "GAIN Capital Holdings, Inc. Completes Acquisition of Open E Cry, LLC from optionsXpress Holdings, Inc.". GAIN Capital. September 6, 2012. Retrieved 2016-07-20.
  18. ↑ "GAIN Capital Completes Acquisition of Galvan Research". GAIN Capital. July 1, 2014. Retrieved 2016-07-20.
  19. 1 2 "GAIN Capital completes acquisition of City Index". GAIN Capital. April 1, 2015. Retrieved 2016-07-20.
  20. ↑ Ramage, James (January 16, 2015). "GAIN Capital Reports Profits From FX Volatility". Wall Street Journal. Retrieved 2016-07-20.
  21. ↑ "GAIN Capital to Launch International Money Transfer Business". GAIN Capital. February 10, 2016. Retrieved 2016-07-20.
  22. ↑ Golovtchenko, Victor (January 7, 2016). "Major ECNs Mark Records in June Due to Brexit Volatility". Finance Magnates. Retrieved 2016-07-20.
  23. ↑ Hatzakis, Steven (June 24, 2016). "GAIN Capital: Not Adversely Affected from Brexit Market Volatility". Finance Magnates. Retrieved 2016-07-20.
  24. ↑ "GAIN Capital Announces Asset Management Services". GAIN Capital. November 14, 2000. Retrieved 2016-07-20.
  25. 1 2 3 "Services". GAIN Capital. Retrieved 2016-07-20.
  26. 1 2 3 "About GTX". GAINgtx.com. Retrieved 12 October 2015.
  27. 1 2 3 "NFA Sanctions GAIN Capital $459,000". Futures. 28 November 2010.
  28. 1 2 "Case Summary - GAIN Capital LLC - NFA 10BCC00015 - NFA ID: 0339826". NFA. November 11, 2010.
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