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Online forex brokers IronFX and FXDirectDealer (FXDD) intend to merge their operations after which they will go public on the NASDAQ exchange via a reverse takeover (RTO) deal with an unannounced listed company, online finance media LeapRate reported on Monday, citing own sources.
The two companies have began a share swap combining 9.9% joint ownership as a first step towards obtaining regulatory approval for the merger deal, according to the media.
The estimated worth of the planned merged company is between $150 million and $225 million.
IronFX provides trading in forex, spot metals, futures, and shares. The group consists of CySEC-regulated holding company IronFX Global, ASIC-regulated GVS AU (until recently known as IronFX Global Australia), 8Safe UK (formerly known as IronFX UK) which is authorized by the UK‘s Financial Conduct Authority (FCA), IronFX Global Ukraine, which is a member of Ukrainian forex self-regulatory organization UCRFIN, and IronFX Global South Africa, regulated by South Africa’s Financial Service Board (FSB).
FXDD is a unit of interdealer broker Tradition, which is part of Switzerland-based Compagnie Financiere Tradition, a company listed on the Swiss stock exchange
The broker withdrew in February 2015 its US licenses for introducing broker (IB), forex firm, swap firm and a member of the US National Futures Association (NFA), according to the NFA register. In H2 2014, the largest US forex broker, Forex Capital Markets, or FXCM, acquired FXDD’s US clients. However, FXDD maintained its presence in the US, instead of exiting the country altogether.
The broker has a European division, FXDD Malta, which is licensed by the Financial Services Authority (FSA) of Malta.
RTO, also known as reverse initial public offering (IPO) or reverse takeover, occurs when a private company becomes exchange-listed by merging with or acquiring a publicly traded company, skipping the IPO-related processes. Unlike IPO, however, the completion of an RTO does not contribute with newly-collected funds.
In mid-April this year, social trading solutions provider ayondo announced it was in advanced negotiations with a company listed on the Singapore Exchange (SGX) on a RTO deal. It said at the time that the new group will be fully controlled and managed by ayondo since its shareholders will have control over 75% of the new group.