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In response to questions from its customers, FXCM Group issued a press release on Monday to clarify its relations to both Global Brokerage (NASDAQ:GLBR) and Leucadia (NYSE:LUK). Major forex broker reassured its clients that any adverse developments at Global Brokerage Inc., formerly known as FXCM Inc., will have no impact on FXCM or its ability to service its customers.
Probably FXCM’s customers are worried about the effects a possible delisting of Global Brokerage from the Nasdaq might have on FXCM’s brokerage services. Forex Capital Markets (FXCM Inc.) (NYSE:FXCM) transferred its stock exchange listing from the New York Stock Exchange to The NASDAQ Global Market in September, 2016. Since then, GLBR’s stock price has been on the fall, and the company warned of possible delisting from NASDAQ in May this year. Previous week the price of Global Brokerage’s (NASDAQ:GLBR) shares has dropped to a new record low of $1.20.
In an attempt to clear up its relationship to Global Brokerage, FXCM stated that Leucadia holds a 49.9% equity interest and up to a 65% economic interest in FXCM, while GLBR is a shareholder with 50.1% equity ownership and a minority economic interest. In its statement FXCM reiterates that it has no responsibility for GLBR’s obligations and that FXCM’s only debt is its loan to Leucadia.
After FXCM closed the closed FastMatch sale previous week and used the proceeds ($46.7 million in cash) to repay the debt to Leucadia, there are $66.8 million outstanding on its original loan. Commenting on its collaborative relationship with Leucadia, Jimmy Hallac, Managing Director of Leucadia and Chairman of FXCM Group said: “We are optimistic about what we can achieve together and re-affirm our long-term commitment. FXCM has had solid operating performance in a challenging market environment and has come a long way in reducing its debt and strengthening its balance sheet.” “Customers should feel confident trading with FXCM as their FX and CFD provider,” he added.
FXCM Group includes the FCA and ASIC-regulated units of Global Brokerage, after the closure of FXCM US in February. The brokerage offers trading in forex and CFDs both to retail and institutional clients, on several types of accounts. The trading platforms for retail clients are the popular MetaTrader 4 and FXCM’s proprietary TradingStation.