FXCM acquires ODL Group to form world's largest Forex broker (Updated)

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Following months of rumors about a potential acquisition I now got a word that the acquisition was finally completed. FXCM is about to acquire ODL (pending due diligence and regulatory approval) and this merger will form world’s largest retail Forex broker.

FXCM has already bought ODL’s US retail business a while ago when ODL decided to exit the US market and this probably paved the way for this much larger acquisition. FXCM’s volumes are about $365 billion a month and ODL, in my opinion, is making at least $100-150 billion a month thus placing the combined company above Oanda in my monthly volume surveys. The merged company will serve 200,000 clients with combined assets of over $800 million.

FXCM is buying here not just a very strong brand name and a client base but also ODL’s presence in the UK, its White Labels and Introducing Brokers and also its Prime Brokerage business which now offers Hotspot, Lava, Integral and Currenex.

However I believe that this acquisition is not just another expansion move made by FXCM but a signal for something much more strategic: FXCM is probably interested in diversifying and offering additional trading instruments such as options, equities and commodities. FXCM is definitely leading the Forex market in technology and lately started offering CFDs and Spread Betting and now following this acquisition FXCM paves its way to being a full fledged online trading broker, not only limited to the Forex niche.

Official announcement: ODL Group Limited To be Acquired by FXCM Holdings, LLC

ODL Group Limited (“ODL”), a leading, independent forex, derivatives, equities and commodities broker, announces today that it has agreed on terms to be acquired by US-based FXCM Holdings LLC (“FXCM”), a leading global forex broker that caters to both retail and institutional markets. ODL’s strong UK and European businesses will provide an excellent complement to FXCM’s sizeable operations in both the United States and Asia. The combined companies will operate as one of the largest non-bank forex brokers globally servicing over 200,000 live trading accounts with combined client assets in excess of US$800 million. The deal is still pending final due diligence review and regulatory approval.

Founded in 1999, FXCM is one of the largest forex brokers, regulated by several financial regulators including the Financial Services Authority in the UK and the Commodity Futures Trading Commission in the U.S. FXCM is one of very few forex and CFD brokers to regularly publish its balance sheet. With over $135 million in firm capital (assets minus liabilities), FXCM exceeds regulatory requirements.

Post acquisition, ODL will continue to trade under its current name. A major benefit to ODL clients will be that they gain access to FXCM’s No Dealing Desk execution on forex trades. Under No Dealing Desk execution, forex trades are fully-automated and executed back-to-back with one of the world’s premier banks or financial institutions. Over ten banks compete to provide FXCM with bid and ask prices, resulting in low spreads and fast execution, with no intervention from a dealing desk on forex trades. Another major benefit of No Dealing Desk execution is the ability to place orders within one pip of the market with no restrictions.

Commenting on the acquisition, Drew Niv, CEO of FXCM, said: “For several years, FXCM has been working towards becoming a major player in Europe. The deal with ODL will provide us with a great opportunity to achieve this. We believe FXCM will be the only retail forex firm with a truly global footprint. In an industry in which size and scale are important, this is a major advantage.”

No financial information regarding the structure of the deal is being released.

London based specialist advisory firm FT Advisors Limited acted as exclusive advisor to ODL.

San Francisco based FT Partners www.ftpartners.com served as sole strategic advisor to FXCM.

Trading foreign exchange and CFDs on margin carries a high level of risk, and may not be suitable for all investors

About ODL Group:

ODL Securities is a leading, independent forex, derivatives, equity and commodity trading house. Headquartered in London, with affiliates in Australia and Turkey, ODL has over 200 staff globally and clients from over 100 countries. ODL Securities offers Retail, IB and White Label clients an integrated approach to trading diverse financial products. The Group companies now trade under the names ODL Markets in the UK (for retail business).

Originally founded in 1994 as an Options House with just 28 staff, ODL Securities Limited received a capital injection from new shareholders in 2004 and a new senior management team was appointed. Since then, a wide range of enhancements have been implemented across all areas of the business, and new products introduced.

ODL Securities Limited is authorised and regulated by the Financial Services Authority and is a member firm of the London Stock Exchange and NYSE Euronext, LIFFE. For further information please visit www.odlmarkets.com

About FXCM Holdings LLC:

Forex Capital Markets (FXCM) is a leading global forex broker that caters to both retail and institutional markets. Founded in 1999, FXCM is one of the largest brokers, regulated by several of the world’s most respected financial authorities. For further information please visit www.fxcm.co.uk

Regulated by:

  • Financial Services Authority (United Kingdom)
  • Commodity Futures Trading Commission (United States);
  • A member of the National Futures Association (United States)
  • Securities and Futures Commission (Hong Kong)
  • Commissione Nazionale per le Società e la Borsa (Italy)
  • Australian Securities and Investments Commission (Australia)
  • Bundesanstalt für die Finanzdienstleistungsaufsicht (Germany)
  • Comité des Établissements de Crédit et des Entreprises d’Investissement (France)
  • Licensed by Dubai Multi Commodities Centre (Dubai)
  • A Broker Member on the Dubai Gold & Commodities Exchange (Dubai)

FXCM Holdings, LLC consists of FXCM Australia LTD., Forex Trading LLC, Forex Capital Markets LLC, Forex Capital Markets LTD, FXCM Asia LTD and FXCM DMCC.


Sucden






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6 Comments on this post

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  1. factcheck said:

    FXCM does not offer Binary options, as far as I know.

    May 4th, 2010 at 10:33 pm
  2. Michael Greenberg said:

    Oops, I meant Spread Betting. Thanks.

    May 5th, 2010 at 12:40 am
  3. Yohay said:

    Very big news indeed. I guess that more M&A action will be seen later in the year.

    May 5th, 2010 at 4:17 am
  4. Michael Greenberg said:

    I doubt. We’ll see couple of brokers leaving US and I doubt anything else big will happen this year.

    May 5th, 2010 at 4:39 am
  5. Jim Hunt said:

    Hi Michael,

    Like you I figured FXCM might well have a strategic interest in ODL’s on exchange business. However both ODL and FXCM have assured me that I am mistaken, and that forex was the sole driver for the deal.

    It will be interesting to see how things develop!

    Jim

    May 6th, 2010 at 12:30 pm
  6. Michael Greenberg said:

    i’m not sure whom were you speaking to there but the acquisition is a purely strategic move. odl’s forex business wasn’t something to be proud of.

    May 7th, 2010 at 3:17 am

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