US retail FX platform consolidation: A change is gonna come
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Foreign Exchange

US retail FX platform consolidation: A change is gonna come

The pace of consolidation in retail FX platforms in the US is starting to accelerate.

The catalyst may be the belief that Congress is certain to approve a hike in capital requirements to $20 million just months after it raised it from $1 million to $5 million.

FX Solutions is one company that appeared relatively well-placed to meet any looming capital hike. In its last filing with the Commodity Futures Trading Commission, the company’s net adjusted capital stood at $26.9 million. In early 2007, the company secured a $100 million investment from Francisco Partners, the US private equity house. Sources say this was for a 70% stake in the company, sold directly by its founders.

The New Jersey-based company has now agreed to be taken over by City Index, the well-known UK-based contracts-for-difference and spread betting company, owned by IPGL, Michael Spencer’s private investment vehicle. City Index also owns IFX and FinSpreads. City has had at best only a patchy operation in the US, and the takeover of FX Solutions gives it a beefed up presence in the market and some highly regarded technology.

No value was put on the all-equity takeover. Francisco Partners is now a shareholder of the City Index Group. The enlarged company has 400 staff in six offices in the UK, United States, China, Singapore and Australia.

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