BEDMINSTER, N.J., Dec. 18, 2017 /PRNewswire/ -- GAIN Capital
Holdings, Inc. (NYSE: GCAP) ("GAIN", "The Company") notes ESMA and
FCA's statements issued 14 December
2017 on their work in relation to the provision of contracts
for differences (CFDs), including rolling spot forex, and binary
options to retail clients.
GAIN remains strongly supportive of measures that enhance
consumer protection in the FX/CFD market and elevate standards
across the sector by, among other things, curbing aggressive
marketing to inexperienced investors and mandating disclosure
requirements that ensure all clients fully understand the risks of
FX/CFD trading.
Over the past 12 months, GAIN has been actively engaged with
both ESMA and FCA to discuss potential regulatory changes governing
the industry. GAIN has advocated for the adoption of leverage
rules which strike an appropriate balance between providing
additional protections to investors and other important
considerations. In addition, GAIN believes that there are other
effective protective measures available to ESMA and the FCA,
including requiring enhanced screening of potential clients to
ensure that only those persons for whom the products are
appropriate are able to trade leveraged derivatives. GAIN has also
strongly advocated for the adoption of more stringent corporate
substance and regulatory capital requirements for obtaining a
license as a CFD broker in the EU.
GAIN has also expressed concern, based in part on experience
operating in other markets which went through regulatory change,
that mandating excessively low leverage levels will have negative
unintended consequences, including driving retail investors
offshore to brokers that do not offer the level of investor
protections present in strongly regulated markets.
As such, GAIN notes the availability of a consultation period in
January 2018 and looks forward to
having the opportunity to further engage with ESMA and FCA on these
matters.
GAIN operates a broadly diversified business, which includes a
retail FX/CFD business spanning eight regulatory jurisdictions, a
U.S.-based retail futures business and an institutional trading
business, GTX. As a result of this diversification across
business lines and geographies, less than 20% of GAIN's total
revenue came from retail customers in UK and EU in the three months
ending September 30, 2017, and the
Company does not expect the proposed changes to regulation, even if
enacted unchanged, to have a material adverse effect on its overall
financial results.
GAIN believes that new regulation tends to lead to industry
consolidation, which will ultimately benefit large,
well-capitalized firms like GAIN Capital.
About GAIN
GAIN Capital Holdings, Inc. provides
innovative trading technology and execution services to retail and
institutional investors worldwide, with multiple access points to
OTC markets and global exchanges across a wide range of asset
classes, including foreign exchange, commodities, and global
equities. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence
across North America, Europe and the Asia
Pacific regions. For further company information,
visit www.gaincapital.com.
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SOURCE GAIN Capital Holdings, Inc.