In the last trading session, the stock price of GAIN Capital Holdings Inc (NYSE:GCAP) gained more than 1% to close the day at $10. The gains came at a share volume of 26.16 million compared to average share volume of 751,576.
GAIN Capital noted that FCA and ESMA’s statements issued in December 2017 on their initiatives in respect to the provision of CFDs, counting rolling binary options and spot forex to retail customers. The company stays extremely supportive of measures that improve customer protection in the CFD/FX market and increase standards across the segment by, among other factors, curbing aggressive marketing to naïve investors and requiring disclosure guidelines that ensure all customers fully know the risks of CFD/FX trading.
Over the preceding 12 months, GAIN Capital has been actively involved with both FCA and ESMA to discuss prospective regulatory changes pertaining the industry. The company has backed for the acceptance of leverage rules which makes an appropriate balance between offering additional protections to shareholders and other vital considerations.
Moreover, GAIN Capital considers that there exist other effective protective plans available to the FCA and ESMA, including needing improved screening of prospective customers to ensure that merely those people for whom the offerings are appropriate can trade leveraged derivatives. The company has also strongly backed for the adoption of stricter corporate substance and regulatory capital guidelines for getting a license as a CFD broker in the European Union.
GAIN Capital has also shown concern, depending in part on experience working in other segments which witnessed regulatory change, that requiring excessively low leverage levels will have adverse unplanned outcomes, including driving retail shareholders offshore to brokers that don’t offer the level of shareholders’ protections present in extremely regulated markets. As such, the company notes the convenience of a consultation period in this month and looks forward to having the chance to further engage with FCA and ESMA on these matters.