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GAIN Capital's GTX Gets Temporary Registration as SEF

Only a couple of hours ago, the Commodity Futures Trading Commission (CFTC), the big-teeth watchdog of the United States, announced that it had granted a temporary registration as a swap execution facility (SEF) to GTX, a subsidiary of Forex major GAIN Capital. Pay attention to the word “temporary”, as this means that the registration marks only the first step in a longer process towards obtaining a full-blown permission from the CFTC so that GTX may  perform the functions of a swap execution facility: for instance, the company cannot at this point register any product for trading. And yet, it's an important move: GTX is showing some will and capabilities to comply with the overly complicated and heavy regulatory demands for SEFs.

 

Talking of regulations, we should first mention that under the Dodd-Frank Wall Street Reform and Consumer ProtectionAct (or simply, the Dodd-Frank Act), a SEF is "a facility, trading system or platform in which multiple participants have the ability to execute or trade swaps by accepting bids and offers made by other participants that are open to multiple participants in the facility or system, through any means of interstate commerce." Starting from last year, certain swaps are traded only via SEFs and the companies willing to perform such functions should register with the CFTC and comply with stricter rules. These include tighter reporting and capital requirements. 

 

These rigid demands, however, are not putting off US companies from getting such registrations. In fact, GTX is already the 20th company to get a CFTC temporary registration as a SEF. 

 

The announcement comes about a year after GAIN Capital announced that it had voluntarily registered as a swap dealer with the CFTC and the National Futures Association (NFA). Back then, the group warned that they would be some impact from this move on its institutional business GTX but also expressed its willingness to accept this impact. We see now that the group is making the next step in bolstering its business.

 

 

Below you can read the official press release by the CFTC.

 

CFTC Issues Notice of Temporary Registration as a Swap Execution Facility to GTX SEF, LLC

 

Washington, DC ― The U.S. Commodity Futures Trading Commission (CFTC) has approved the application of GTX SEF, LLC (GTX) for temporary registration as a swap execution facility (SEF). GTX is the 20th SEF temporarily registered by the CFTC to date. GTX is a Delaware limited liability company, and an indirect wholly-owned subsidiary of Gain Capital Holdings, Inc., a publicly-traded company.

GTX will be required, as will all future temporarily and fully registered SEFs, to demonstrate continued compliance with all applicable provisions of the Commodity Exchange Act and CFTC regulations, including regulations in Part 37 relating to Core Principles and Other Requirements for Swap Execution Facilities, as well as any future regulations, amendments, guidance, and interpretations issued by the CFTC. As a next step, the CFTC will undertake a substantive review of GTX’s application for full registration.

 

 

About GAIN Capital 

 

GAIN Capital Holdings, Inc. (NYSE:GCAP) is a global leader of online trading services provision. GAIN's technology offers market access and automated trade execution across multiple assets, including Forex, contracts for difference (CFDs) and exchange-based products, to both retail and institutional investors.

Through its retail brand, FOREX.com, GAIN provides retail traders across the globe with access to various OTC financial markets. FOREX.com supports clients from more than 140 countries, with its products and services available in many languages, including English, Arabic, Chinese, Japanese, and Russian.  

GAIN Capital and its affiliates boast offices in New York City; Bedminster, New Jersey; London; Sydney; Hong Kong; Tokyo; Singapore and Beijing.

 

TAGS: gain capital  gtx  gtx forex  forex ecn  us forex  us forex market  swap execution facility  sef  cftc  commodity futures trading commission  sef registration  temporary registration  us market  us regulation  swap trading  swap dealer 

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