Exclusive: GAIN Capital Limits Omnibus Accounts for Institutional Clients

After completing a string of acquisitions in the retail space over the past few years, GAIN Capital is poised to consolidate its institutional foreign exchange business and to calibrate its partnerships to claim greater visibility and exposure.

We will focus the majority of efforts on fully disclosed business

The NYSE-listed brokerage envisions a limited role for the omnibus accounts it is operating on its platform, where trades are facilitated for other brokers' clients, such as Ameritrade and the German headquartered FXFlat.

“We will focus the majority of efforts on supporting fully disclosed partnership business, i.e. IBs and Trading Names," a company spokesperson said, stating however, that GAIN will "continue to support omnibus solutions on a select basis as well as Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term provision, which enables partners to connect via FIX API to our full range of FX and CFD markets.”

The report comes on the heels of a broader process of consolidation that GAIN Capital is undergoing. In March, the firm's shareholders approved the acquisition of City Index for $118 million, reporting shortly afterwards a combined $1.1 billion pool of client funds.

Additionally, the company has announced the phasing out its GFT brand, as it is scrapping its Dealbook 360 Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term. Depending on their geographical region, individual clients have received an alternative offering from the two strongest brands in GAIN's portfolio, City Index and Forex.com.

"Following our acquisition of City Index earlier this year, we are consolidating our trading technology and the flagship retail trading platform for the combined business will be built around City Index’s Advantage Trader suite," GAIN's spokesperson explained.

Migrating Clients?

While primarily serving retail traders, The DealBook 360 has white label agreements for institutional clients in place. GAIN Capital has committed to offering a full white labelling solution for its clients, as well as supporting liquidity provision, with migration to the Advantage Trader taking place within this year.

It remains to be seen if the bulk of GAIN Capital's institutional clients using the Dealbook 360 choose to migrate to the Advantage Trader platform. The solution has been well developed within the City Index brand, and given that the Dealbook 360 platform will cease to exist any alternative would require finding a new partner.

While it makes sense for GAIN to aim for a consolidated, upfront business, these are bold moves taking into consideration the technological undertaking and the risk of losing clients involved.