GAIN Capital

GAIN Capital was a United States-based online trading services provider founded in 1999 in Bedminster, New Jersey. The company emerged during the early development of electronically delivered retail foreign-exchange trading and built a business serving both individual and institutional market participants. Its services gave customers access to foreign exchange, contracts for difference, margin-based speculation and exchange-traded products through electronic execution platforms. The company operated across several parts of the trading-services value chain. Its retail brands included Forex.com, which became its largest consumer-facing foreign-exchange business, and City Index, a British-origin platform acquired in 2014 that strengthened GAIN Capital's CFD, spread-betting and international operations. The group also operated GTX, an electronic communications network and multi-dealer foreign-exchange venue aimed at hedge funds and institutional clients. Other businesses included SALT Invest, an advisory CFD operation, and Daniels Trading, a futures brokerage and trading-services provider. GAIN Capital's technology offering centered on its proprietary FOREXTrader PRO platform, later renamed StoneX Pro after the acquisition by StoneX Group, together with MetaTrader 4. The company also provided market-access, execution and white-label services to other online trading businesses. Its customer base extended across more than 140 countries, and the business generated more than half of its revenue outside the United States according to the referenced company description. Operations and affiliates had offices in the United States, the United Kingdom, Poland, Australia, Hong Kong, Japan and Singapore. GAIN Capital became a public company in 2010, although its initial offering was reduced shortly before completion because the intended price level was not achieved. Its subsequent expansion was driven in part by acquisitions. In October 2014, it purchased UK-based rival City Index for approximately $118 million, adding scale in CFDs and expanding the group's position in the United Kingdom and other international markets. In February 2017, it agreed to purchase the U.S. customer accounts of FXCM after U.S. regulators barred FXCM from conducting business in the country. The transaction used a contingent payment structure based on subsequent account activity. The company also faced regulatory scrutiny. In 2008, China's banking regulator determined that GAIN Capital had breached rules concerning the direct online solicitation of Chinese residents for retail foreign-exchange services without the required permission. GAIN Capital temporarily stopped accepting Chinese clients between 2008 and 2010. In 2010, the National Futures Association fined the company over alleged margin, liquidation and price-slippage practices that were considered detrimental to customers. GAIN Capital agreed to pay a fine and reimburse affected customers for negative slippage during the specified review period. In February 2020, StoneX Group, then known as INTL FCStone, announced an all-cash agreement to acquire GAIN Capital Holdings. The transaction was approved by the boards of both companies and valued at approximately $236 million in equity value. Following completion, GAIN Capital ceased to operate as an independent listed company, while important brands and platforms, including Forex.com, City Index and the proprietary trading technology later known as StoneX Pro, continued within StoneX's broader financial-services structure.

GAIN Capital was established in 1999 in Bedminster, New Jersey, during the early expansion of internet-based foreign-exchange trading. Rather than operating as a traditional bank, it developed electronic systems that allowed retail and institutional customers to obtain market access and execute leveraged trades in global currency markets. The company's core activity became margin foreign-exchange trading, in which customers used collateral to take positions whose notional value exceeded the funds deposited in their accounts. Over time, GAIN Capital broadened its business beyond retail forex. Its consumer trading operations were represented primarily by Forex.com, while its institutional division included GTX, a multi-dealer foreign-exchange platform and electronic communications network for professional market participants. The company also operated or owned businesses associated with CFD advice and futures trading, including SALT Invest and Daniels Trading. Its technology stack included the proprietary FOREXTrader PRO platform and MetaTrader 4. The proprietary platform was later renamed StoneX Pro after the acquisition of GAIN Capital by StoneX Group. International expansion was central to the company's development. Although headquartered in the United States, GAIN Capital served customers in more than 140 countries and generated more than half of its revenue outside the United States according to the referenced account. Affiliates and offices were located in several major financial and technology centers, including New York and New Jersey, London, Cracow, Sydney, Hong Kong, Tokyo and Singapore. The company also supplied white-label trading infrastructure to other online foreign-exchange businesses. GAIN Capital's growth was accompanied by regulatory challenges. In 2008, China's financial regulator objected to the company's direct internet solicitation of Chinese residents for retail forex services without a required permit. The company temporarily stopped accepting Chinese clients during the period from 2008 to 2010. In October 2010, the National Futures Association imposed a $459,000 fine after alleging that GAIN Capital's margin, liquidation and price-slippage practices benefited the firm at customers' expense. GAIN Capital agreed to reimburse customers for negative slippage on affected trades during the review period. The company entered public markets in 2010. Its initial New York Stock Exchange offering was reduced shortly before launch because the proposed price was not achieved, but the listing nevertheless provided a public-company structure for subsequent expansion. In October 2014, GAIN Capital purchased City Index, a UK-based competitor, for approximately $118 million. The deal added a large CFD and spread-betting operation and increased GAIN Capital's reach in Britain and other non-U.S. markets. In 2017, GAIN Capital expanded its U.S. retail customer base by agreeing to acquire FXCM's U.S. accounts after regulatory action prevented FXCM from continuing American operations. The purchase price varied according to account activity, with different payments applying to accounts that traded within specified periods. This transaction reinforced GAIN Capital's role as one of the established U.S. online forex providers. GAIN Capital's independent corporate existence ended in 2020. StoneX Group, then operating under the INTL FCStone name, agreed to acquire the company in an all-cash transaction valued at about $236 million in equity value. After the acquisition, GAIN Capital was no longer an independent listed company, while its principal brands, customer operations and trading technology became part of StoneX's wider financial-services business.

1. 2020Acquisition by StoneX

   StoneX, formerly INTL FCStone, announces an approximately $236 million all-cash acquisition of GAIN Capital Holdings.

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2. 2017FXCM U.S. account acquisition

   GAIN Capital agrees to acquire FXCM's U.S. customer accounts following regulatory action against FXCM.

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3. 2014City Index acquisition

   GAIN Capital acquires UK-based rival City Index for approximately $118 million.

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4. 2010Public listing

   GAIN Capital floats part of its shareholding on the New York Stock Exchange after scaling back its initial offering.

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5. 2010National Futures Association settlement

   The company is fined and agrees to reimburse customers in connection with alleged margin, liquidation and negative-slippage practices.

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6. 2008Chinese regulatory intervention

   China's banking regulator determines that the company breached rules governing direct online solicitation of Chinese retail forex customers.

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7. 1999GAIN Capital is founded

   GAIN Capital is established in Bedminster, New Jersey, and begins developing online foreign-exchange trading services.

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Global electronic trading and market-access provider serving retail traders, professional investors, hedge funds and institutional clients.

• Forex.comRetail foreign-exchange platform

  Forex.com was GAIN Capital's largest retail foreign-exchange brand. It provided individual traders with electronic access to currency markets, leveraged or margin-based trading and related market information. The brand served customers in multiple international markets and remained part of the StoneX organization after the acquisition of GAIN Capital.

• City IndexRetail forex and CFD platform

  City Index was a UK-based online trading business acquired by GAIN Capital in 2014. Its offering broadened the group beyond spot foreign exchange into contracts for difference and spread betting, while also adding international distribution and operating capabilities.

• GTXInstitutional foreign-exchange electronic communications network

  GTX was GAIN Capital's institutional foreign-exchange venue. It operated as an independent ECN and multi-dealer platform intended for hedge funds and other professional or institutional participants seeking electronic FX execution and market access.

• FOREXTrader PROElectronic trading platform

  FOREXTrader PRO was GAIN Capital's proprietary electronic trading platform. It supported the company's online forex and related trading services and was subsequently renamed StoneX Pro after GAIN Capital became part of StoneX Group.

• MetaTrader 4Third-party electronic trading platform

  MetaTrader 4 was offered alongside GAIN Capital's proprietary platform as an electronic interface for trading services. Its inclusion gave customers access to a widely used trading environment in addition to the company's own technology.

• SALT InvestCFD advisory business

  SALT Invest was an advisory CFD business associated with GAIN Capital. The operation complemented the group's execution and platform businesses by providing advice and related services connected with contracts for difference.

• Daniels TradingFutures trading provider

  Daniels Trading was GAIN Capital's futures-related business. It extended the group into exchange-based products and brokerage services beyond over-the-counter foreign exchange and CFDs.

• 2020Sale to StoneX GroupM&A

  StoneX, then known as INTL FCStone, pursued GAIN Capital to expand its retail trading and online brokerage capabilities.

  What changed. StoneX agreed to acquire GAIN Capital Holdings in an all-cash transaction approved by both companies' boards.

  Aftermath. GAIN Capital ceased to be an independent listed company, and its brands and platforms became part of StoneX's financial-services group.

  Equity value. Approximately $236 million (2020)

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• 2017Acquisition of FXCM's U.S. customer accountsM&A

  FXCM was barred by U.S. regulators from conducting business in the United States, creating an opportunity for another regulated broker to take over its U.S. accounts.

  What changed. GAIN Capital agreed to acquire the accounts and used a payment structure tied to subsequent customer trading activity.

  Aftermath. The agreement expanded GAIN Capital's U.S. retail customer base, although the source material does not provide a later account-total or revenue outcome.

  Account acquisition consideration. $7.2 million total commitment → $500 per account trading within 76 days and $250 per account trading subsequently (2017)

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• 2014Purchase of City IndexM&A

  GAIN Capital sought to expand its international retail trading business and strengthen its CFD offering.

  What changed. The company acquired UK-based rival City Index for approximately $118 million.

  Aftermath. The acquisition increased GAIN Capital's presence in the United Kingdom and broadened its product range across CFDs, spread betting and foreign exchange.

  Acquisition value. $118 million (2014)

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• 2010NFA margin, liquidation and slippage actionControversy

  The National Futures Association fined GAIN Capital $459,000 over alleged practices involving margin, liquidation and price slippage that benefited the company at customers' expense. The company agreed to refund affected customers for negative slippage during the specified period.

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• 2008Chinese retail-forex solicitation issueControversy

  China's financial regulator said GAIN Capital had breached rules prohibiting retail forex firms from directly soliciting Chinese residents online without the necessary permit. The company temporarily stopped taking Chinese clients between 2008 and 2010.

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• 2020StoneX announces acquisition of GAIN Capital

  INTL FCStone, later renamed StoneX Group, announced an all-cash agreement to acquire GAIN Capital Holdings for approximately $236 million in equity value. The transaction ended GAIN Capital's independent public-company status.

  M&A
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• 2017GAIN Capital agrees to acquire FXCM's U.S. client accounts

  After FXCM was barred by the Commodity Futures Trading Commission and National Futures Association from conducting business in the United States, GAIN Capital agreed to acquire its U.S. customer accounts. The consideration was based partly on whether accounts subsequently traded.

  M&ARegulation
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• 2014GAIN Capital acquires City Index

  GAIN Capital acquired UK-based online trading rival City Index for approximately $118 million, strengthening its CFD activities and expanding its international foreign-exchange business.

  M&A
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• 2010GAIN Capital completes a scaled-back public offering

  GAIN Capital became publicly listed on the New York Stock Exchange after reducing the size of its initial offering when the targeted price level was not reached.

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1. GAIN Capital
2. GAIN Capital corporate website