While nothing is public yet and the deal may not have been even signed yet, it seems that FXCM is about to either partner or acquire Forex Club’s US clients base. Forex Club recently announced that it will downgrade its US license from RFED to FCM and will focus on institutional forex business in the US rather than the retail one.
Forex Club’s US clients base isn’t big and in June 2012 Forex Club reported to the CFTC that it had about $3.5 million in retail forex obligations and the Q2 2012 profitability report stated that it had about 1,600 active forex traders. In comparison, our estimate of Forex Club’s Russian business is 28,000 active forex traders and over $32 million in client equity.
FXCM is the largest forex broker based in the US and world’s second largest in terms of volume (constantly battling out for the first place with Japan’s GMO Click Securities) so Forex Club’s traders are getting a new safe home. According to same profitability report and CFTC filing FXCM has $84 million in retail forex obligations and over 19,000 active traders in the US. FXCM’s global business is about ten times bigger than its US one.
Both brokers declined to comment with FXCM’s spokeswoman commenting that “FXCM does not comment on rumors. With respect to partnerships or acquisitions, they are clearly part of our growth strategy and at any given time we may be in discussions with various parties, but as we has said in the past, very few of these discussions result in completed transactions. We limit our comments to completed transactions.”