ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-4568600
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Bedminster One
135 Route 202/206
Bedminster, New Jersey
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07921
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of exchange on which registered
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Common stock, $0.00001
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART
III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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PART
IV
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Item 15.
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Exhibits and Financial Statement Schedules
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EXHIBIT INDEX
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ITEM 1.
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BUSINESS
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Key Financial Data
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||||||||||||||||||
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(in millions)
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||||||||||||||||||
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Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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Net Revenue
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$
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308.6
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$
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411.8
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$
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435.3
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$
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369.2
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$
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267.7
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Net (loss)/income applicable to GAIN Capital Holdings, Inc.
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$
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(11.2
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)
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$
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35.3
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$
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10.3
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$
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24.9
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$
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28.1
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Adjusted net (loss)/income
(1)
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$
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(9.4
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)
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$
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45.1
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$
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34.3
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$
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30.9
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$
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29.8
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Key Operating Metrics
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(Unaudited)
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Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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Retail
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OTC Trading Volume (billions)
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$
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2,473.6
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$
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2,822.0
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$
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3,985.8
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$
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2,430.5
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$
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1,796.7
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OTC Average Daily Volume (billions)
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$
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9.6
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$
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10.9
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$
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15.4
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$
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9.4
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$
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6.9
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Active OTC Accounts
(2) (3)
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132,262
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126,528
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142,836
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91,328
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93,143
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Client Assets (millions)
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$
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749.6
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$
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599.5
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$
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675.6
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$
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563.2
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$
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592.9
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Institutional
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ECN Volume (billions)
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$
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2,979.6
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$
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2,180.7
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$
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1,865.1
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$
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1,498.6
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$
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1,127.9
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ECN Average Daily Volume (billions)
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$
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11.5
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$
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8.4
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$
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7.2
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$
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5.8
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$
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4.3
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Swap Dealer Volume (billions)
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$
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720.5
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$
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779.4
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$
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806.8
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$
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1,685.1
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$
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1,471.7
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Swap Dealer Average Daily Volume (billions)
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$
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2.8
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$
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3.0
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$
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3.1
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$
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6.5
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$
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5.7
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Futures
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Number of Futures Contracts
(4)
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6,857,870
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8,304,376
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8,623,392
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7,027,008
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5,386,383
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Futures Average Daily Contracts
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27,322
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32,954
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34,356
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28,108
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21,460
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Active Futures Accounts
(2)
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7,838
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8,368
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8,668
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8,184
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7,064
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Client Assets (millions)
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$
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229.2
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$
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346.0
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$
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245.0
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$
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196.4
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$
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146.4
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(1)
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Adjusted net income is a non-GAAP financial measure and represents our net income excluding restructuring, acquisition and integration-related expenses, impairment on investment, loss on extinguishment of debt, and other corporate expenses. Please refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” under heading “
Key Income Statement Line Items and Key Operating Metrics
” and under heading “
Reconciliation of Non-GAAP Financial Measures
” for discussion and reconciliation of non-GAAP financial measures.
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(2)
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Represents accounts which executed a transaction over the last 12 months.
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(3)
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We have updated our historical active account disclosures to reflect a change in definition for certain accounts.
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(4)
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Futures contracts represent the total number of contracts transacted by customers of our futures business.
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•
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Pursuing organic growth by:
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Leveraging our global footprint and powerful brand assets to increase our overall share in the markets we operate.
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Focusing on the development of our direct business versus our lower margin indirect business;
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Providing an attractive proposition to address the needs of our two distinct customer segments: experienced active traders and retail investors; and
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Introducing new, innovative products and services; including upgraded and enhanced trading platforms and tools as well as digital advisory products.
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Increasing operational excellence by:
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Increasing automation, thereby reducing service costs;
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Simplifying our technology “stack”;
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Rationalizing our brands across our three business segments; and
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Seeking to achieve an optimal balance between insourcing versus outsourcing.
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Reducing revenue volatility through:
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Reducing the variability between customer transaction revenue (CTR) and reported results;
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Implementing artificial intelligence driven hedging programs;
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Decreasing the cost of hedging; and
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Further optimizing trade flow.
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We will also continue to selectively review mergers and acquisitions and other inorganic opportunities which complement our organic growth strategy.
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•
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Regulated Forex Firm such as OANDA Corporation and FXCM. Like us, these firms have also expanded globally over the past several years, and we consider them to be competitors in several of our key markets. In February 2017, FXCM was required to cease offering its services in the United States by the Commodities Futures Trading Commission and we acquired substantially all of the company's U.S.-domiciled customers. For more information, please refer to Note
7
to our audited consolidated financial statements included in this Annual Report.
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•
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Global Multi-Asset Trading Firms, including firms such as Interactive Brokers, IG Group Holdings plc and CMC Group. These firms generally offer a broad set of asset classes and earn a significant percentage of their revenue from CFDs, forex and exchange-traded products.
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•
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sales and marketing activities, including our interaction with, and solicitation of, customers;
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trading practices, including the types of products and services we may offer;
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the methods by which customers can fund accounts with us;
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treatment of customer assets, including custody, control, safekeeping and, in certain countries, segregation of our customer funds and securities;
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maintaining specified minimum amounts of capital and limiting withdrawals of funds from our regulated operating subsidiaries;
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continuing education requirements for our employees;
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anti-money laundering practices;
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recordkeeping and reporting; and
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supervision regarding the conduct of directors, officers and employees.
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creating “retail foreign exchange dealers,” or RFEDs, a new regulated category of forex brokers focused on retail investors that are permitted to act as counterparty to retail forex transactions;
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imposing an initial minimum security deposit amount between
2.0%
and 5.0%, depending on the pair, of the notional value for retail forex transactions in “major currency” pairs and between
5.0%
and 20%, depending on the pair, of the notional value for retail forex transactions in "non-major currency";
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providing that introducing brokers, money managers and fund managers must either (i) register with the CFTC and become members of the NFA or apply for an exemption from registration and (ii) meet the minimum net capital requirements applicable to futures and commodity options introducing brokers or enter into a guarantee agreement with a CFTC-regulated forex dealer member and permitting only one such guarantee agreement per introducing broker;
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requiring that a risk disclosure statement be provided to every retail forex customer, including disclosure of the number of profitable and unprofitable non-discretionary accounts maintained by the forex broker during the four most recent calendar quarters; and
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prohibiting RFEDs, FCMs and introducing brokers from including statements in sales and marketing materials that would appear to convey to potential retail forex customers that there is a guaranty against loss, and requiring that FCMs, RFEDs and introducing brokers provide retail forex customers with enhanced written disclosure statements that, among other things, inform customers of the risk of loss; and
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rules that, beginning in October 2010, require us to ensure that our customers residing in the United States have accounts open only with our NFA-member operating entity, GCGL;
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amendments to the Commodity Exchange Act that, beginning on
July 15, 2011
, required essentially all retail transactions in any commodity other than foreign currency to be executed on an exchange, rather than OTC;
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•
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a requirement that federal banking regulators adopt new rules regarding the conduct and operation of retail forex businesses by banks; and
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•
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a requirement that the SEC adopt rules regarding the conduct and operation of retail forex businesses by broker-dealers.
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•
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maintain adequate segregation of client funds;
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maintain adequate records in order to be able to meet future obligations when we hold client assets as collateral and be able to identify details of those assets to clients;
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comply with custody rules when holding financial instruments (as defined by MiFID I) or other investments belonging to a client in the course of our business, including the safeguarding of those investments and holding all dividends and fees (e.g., stock lending fees) in accordance with the client money rules;
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have adequate organizational arrangements in place to minimize the risk that client money may be paid for the account of a client whose money has not yet been received by us;
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undertake daily internal and external client money reconciliations; and
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appoint an individual who is responsible for Client Asset Sourcebook, or CASS, oversight.
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report all derivative contracts and their lifecycle events (concluded, modified and terminated) to which we are a party to a trade repository either by ourselves or through a third party;
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keep all records relating to concluding of derivative contracts and any subsequent modification for 5 years;
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comply with the risk management requirements for OTC bilateral derivatives, including portfolio reconciliation, portfolio compression, record keeping, dispute resolution and margining (these requirements began to be phased in starting in September 2016); and
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clear through central counterparties all OTC derivatives which will be subject to the mandatory clearing obligation.
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the types of services, transactions and financial instruments with which the retail client is familiar;
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the nature, volume, and frequency of the retail client’s transactions in financial instruments and the period over which they have been carried out; and
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the level of education, and profession or relevant former profession of the retail client or potential retail client.
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•
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expands the number of financial instruments for which firms are required to carry out an appropriateness assessment before providing an execution only service to retail clients;
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extends the pre- and post-trade transparency regime to derivatives traded on regulated markets, multi-lateral trading facilities, or MTFs, and organized trading facilities, or OTFs;
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expands transaction reporting to those financial instruments traded on MTFs, OTFs, and those financial instruments where the underlying instrument is traded on a Trading Venue; and
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•
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gives E.U. Member State regulators the new power to ban or restrict the marketing, distribution or sale of a financial instrument or types of financial practice where there is a threat to investor protection, the orderly functioning and integrity of markets or to financial stability. The European Banking Authority and the European Securities and Markets Authority have similar powers to impose a ban on an EU-wide basis or in relation to a particular E.U. Member State.
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•
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price changes in foreign currencies;
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•
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lack of liquidity in foreign currencies in which we have positions; and
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•
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inaccuracies in our proprietary pricing mechanism, or rate engine, which evaluates, monitors and assimilates market data and reevaluates our outstanding currency quotes, and is designed to publish prices reflective of prevailing market conditions throughout the trading day.
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develop products and services that are similar to ours, or that are more attractive to customers than ours in one or more of our markets;
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provide products and services we do not offer;
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provide execution and clearing services that are more rapid, reliable, efficient or less expensive than ours;
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offer products and services at prices below ours to gain market share and to promote other businesses, such as forex options, futures, listed securities, CFDs, precious metals and OTC derivatives;
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adapt at a faster rate to market conditions, new technologies and customer demands;
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offer better, faster and more reliable technology;
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outbid us for desirable acquisition targets;
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more efficiently engage in and expand existing relationships with strategic alliances;
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market, promote and sell their products and services more effectively; and
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develop stronger relationships with customers.
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•
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changing customer demands;
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the need to enhance existing services and products or introduce new services and products;
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•
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evolving industry practices; and
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rapidly evolving technology solutions.
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less developed or mature local technological infrastructure and higher costs, which could make our products and services less attractive or accessible in emerging markets;
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•
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difficulty in complying with the diverse regulatory requirements of multiple jurisdictions, which may be more burdensome, not clearly defined and subject to unexpected changes, potentially exposing us to significant compliance costs and regulatory penalties;
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less developed and established local financial and banking infrastructure, which could make our products and services less accessible;
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•
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reduced protection of intellectual property rights;
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•
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inability to enforce contracts;
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•
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difficulties and costs associated with staffing and managing foreign operations, including reliance on newly hired local personnel;
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•
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tariffs and other trade barriers;
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•
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currency and tax laws that may prevent or restrict the transfer of capital and profits among our various operations around the world; and
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•
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time zone, language and cultural differences among personnel in different areas of the world.
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•
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diversion of management time and focus from operating our business to address challenges that may arise in integrating the acquired business;
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transition of operations, users and customers onto our existing platforms or onto platforms of the acquired company;
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failure to successfully further develop the acquired business;
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failure to realize anticipated operational or financial synergies;
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•
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implementation or remediation of controls, procedures, and policies at the acquired company;
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in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries;
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liability for activities of the acquired company before the acquisition, such as violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; and
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integration of the acquired business’ accounting, human resource and other administrative systems, and coordination of trading and sales and marketing functions.
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•
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sales and marketing activities, including our interaction with, and solicitation of, customers;
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•
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trading practices, including the types of investment products we may offer;
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•
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the methods by which customers can fund accounts with us, including the recently implemented NFA ban on the use of credit cards to fund accounts in the United States;
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•
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treatment of customer assets, including custody, control, safekeeping and, in certain countries, segregation of our customer funds and securities;
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•
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maintaining specified minimum amounts of capital and limiting withdrawals of funds from our regulated operating subsidiaries;
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•
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continuing education requirements for our employees;
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•
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anti-money laundering practices;
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•
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record keeping and reporting; and
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•
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supervision regarding the conduct of directors, officers and employees.
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•
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our sales and marketing activities;
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•
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the use of a website specifically targeted to potential customers in a particular country;
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•
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the minimum income level or financial sophistication of potential customers we may contact;
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•
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our ability to have a physical presence in a particular country; or
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•
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the types of services we may offer customers physically present in each country.
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•
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future announcements concerning us or our competitors, including the announcement of acquisitions;
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•
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changes in government regulations or in the status of our regulatory approvals or licensure;
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•
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public perceptions of risks associated with our services or operations;
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•
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developments in our industry; and
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•
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general economic, market and political conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors.
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•
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support more rapid expansion;
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•
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develop new or enhanced services and products;
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•
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respond to competitive pressures;
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•
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acquire new businesses, products or technologies; or
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•
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respond to unanticipated requirements.
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2017
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2016
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||||||||||||
Quarter
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High
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Low
|
|
High
|
|
Low
|
||||||||
First Quarter
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$
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8.40
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$
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6.62
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$
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7.61
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$
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6.21
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Second Quarter
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$
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8.68
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$
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5.63
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$
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7.03
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$
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6.11
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Third Quarter
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$
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7.21
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|
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$
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6.16
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|
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$
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6.97
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$
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6.15
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Fourth Quarter
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$
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10.00
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$
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6.14
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$
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7.01
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$
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4.57
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|
|
|
|
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Total
|
|
Maximum Number
|
||||||
|
|
|
|
|
Number of Shares
|
|
(or Approximate
|
||||||
|
|
|
|
|
Purchased as
|
|
Dollar Value) of
|
||||||
|
|
|
|
|
Part of Publicly
|
|
Shares that May
|
||||||
|
Total Number
|
|
|
|
Announced
|
|
Yet Be Purchased
|
||||||
|
of Shares
|
|
Average Price
|
|
Plans or
|
|
Under the Plans or
|
||||||
Period
|
Purchased
(1)
|
|
Paid per Share
(1)
|
|
Programs
(1)
|
|
Programs
(1)(2)(3)
|
||||||
January 2017
|
283,436
|
|
|
$
|
7.06
|
|
|
283,436
|
|
|
$
|
22,539,824
|
|
February 2017
|
188,013
|
|
|
$
|
7.98
|
|
|
188,013
|
|
|
$
|
21,036,448
|
|
March 2017
|
140,974
|
|
|
$
|
8.15
|
|
|
140,974
|
|
|
$
|
19,884,029
|
|
April 2017
|
125,186
|
|
|
$
|
7.58
|
|
|
125,186
|
|
|
$
|
18,932,263
|
|
May 2017
|
263,238
|
|
|
$
|
6.08
|
|
|
263,238
|
|
|
$
|
17,327,119
|
|
June 2017
|
372,838
|
|
|
$
|
5.90
|
|
|
372,838
|
|
|
$
|
15,119,768
|
|
July 2017
|
190,823
|
|
|
$
|
6.47
|
|
|
190,823
|
|
|
$
|
13,880,398
|
|
August 2017
|
2,211,775
|
|
|
$
|
6.83
|
|
|
88,789
|
|
|
$
|
13,267,186
|
|
September 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
13,267,186
|
|
October 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
13,267,186
|
|
November 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
13,267,186
|
|
December 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
13,267,186
|
|
|
|
|
|
|
Number of
|
||||
|
|
|
|
|
securities remaining
|
||||
|
Number of
|
|
Weighted-average
|
|
available for future
|
||||
|
securities to be
|
|
exercise price
|
|
issuance under
|
||||
|
issued upon exercise
|
|
of
|
|
equity compensation
|
||||
|
of outstanding
|
|
outstanding
|
|
plans (excluding
|
||||
|
options, warrants
|
|
options, warrants
|
|
securities reflected
|
||||
|
and rights
|
|
and rights
|
|
in column (a))
|
||||
Plan category
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
1,294,625
|
|
|
$
|
6.25
|
|
|
3,980,836
|
|
|
Selected Consolidated Statement of Operations and Comprehensive Income
|
||||||||||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
(1)
|
|
2014
|
|
2013
(1)
|
||||||||||
Consolidated Statement of Operations and Comprehensive Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
308,624
|
|
|
$
|
411,825
|
|
|
$
|
435,347
|
|
|
$
|
369,189
|
|
|
$
|
267,691
|
|
Total operating expense
|
$
|
308,946
|
|
|
$
|
354,162
|
|
|
$
|
417,698
|
|
|
$
|
317,592
|
|
|
$
|
222,968
|
|
(Loss)/income before income tax (benefit)/expense
|
$
|
(17,087
|
)
|
|
$
|
47,242
|
|
|
$
|
8,427
|
|
|
$
|
45,450
|
|
|
$
|
45,490
|
|
Net (loss)/income applicable to GAIN Capital Holdings, Inc.
|
$
|
(11,195
|
)
|
|
$
|
35,272
|
|
|
$
|
10,279
|
|
|
$
|
24,877
|
|
|
$
|
28,107
|
|
(Loss)/earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.76
|
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
|
$
|
0.53
|
|
|
$
|
0.71
|
|
Weighted average common shares outstanding used in computing (loss)/earnings per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
46,740,097
|
|
|
48,588,917
|
|
|
47,601,979
|
|
|
40,561,644
|
|
|
36,551,246
|
|
|||||
Diluted
|
46,740,097
|
|
|
48,785,674
|
|
|
48,379,051
|
|
|
43,214,895
|
|
|
39,632,878
|
|
|||||
Cash dividends per share
|
$
|
0.24
|
|
|
$
|
0.21
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
Selected Consolidated Balance Sheet
|
||||||||||||||||||
|
(in thousands unless otherwise stated)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
(1)
|
|
2014
|
|
2013
(1)
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
209,688
|
|
|
$
|
234,760
|
|
|
$
|
171,888
|
|
|
$
|
139,351
|
|
|
$
|
39,871
|
|
Cash and securities held for customers
|
$
|
978,828
|
|
|
$
|
945,468
|
|
|
$
|
920,621
|
|
|
$
|
759,559
|
|
|
$
|
739,318
|
|
Receivables from brokers
|
$
|
78,503
|
|
|
$
|
61,096
|
|
|
$
|
121,153
|
|
|
$
|
134,908
|
|
|
$
|
227,630
|
|
Total assets
|
$
|
1,448,647
|
|
|
$
|
1,430,084
|
|
|
$
|
1,424,559
|
|
|
$
|
1,183,301
|
|
|
$
|
1,112,560
|
|
Payables to customers
|
$
|
978,828
|
|
|
$
|
945,468
|
|
|
$
|
920,621
|
|
|
$
|
759,559
|
|
|
$
|
739,318
|
|
Convertible senior notes
|
$
|
132,221
|
|
|
$
|
124,769
|
|
|
$
|
121,740
|
|
|
$
|
68,367
|
|
|
$
|
65,360
|
|
Total shareholders' equity
|
$
|
285,748
|
|
|
$
|
294,182
|
|
|
$
|
306,084
|
|
|
$
|
249,920
|
|
|
$
|
226,723
|
|
(1)
|
There were material business combinations that occurred in
2013
and
2015
, respectively, which impacted the comparability of the amounts shown above. Please refer to Note
10
to our audited consolidated financial statements for further discussion.
|
•
|
$500
per account for each transferred account that first executes a new trade with GAIN during the
76
-day period immediately following the closing of the account transfer (the “Initial Period”); and
|
•
|
$250
per account for each transferred account that (i) did not execute a new trade with GAIN during the Initial Period and (ii) executes a new trade with GAIN during the
77
-day period immediately following the last day of the Initial Period.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss)/income applicable to GAIN Capital Holdings, Inc.
|
$
|
(11,195
|
)
|
|
$
|
35,272
|
|
|
$
|
10,279
|
|
Income tax (benefit)/expense
|
(6,855
|
)
|
|
9,768
|
|
|
(3,512
|
)
|
|||
Equity in net loss of affiliate
|
343
|
|
|
62
|
|
|
—
|
|
|||
Non-controlling interest
|
620
|
|
|
2,140
|
|
|
1,660
|
|
|||
Pre-tax (loss)/income
|
(17,087
|
)
|
|
47,242
|
|
|
8,427
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Acquisition expense
|
—
|
|
|
—
|
|
|
2,819
|
|
|||
Restructuring
|
—
|
|
|
1,041
|
|
|
3,482
|
|
|||
Integration
|
—
|
|
|
2,788
|
|
|
33,092
|
|
|||
Other items
(1)
|
6,391
|
|
|
—
|
|
|
—
|
|
|||
Adjustment to fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(6,722
|
)
|
|||
Legal settlement
|
—
|
|
|
9,205
|
|
|
—
|
|
|||
Bad debt related to SNB event in January 2015
|
—
|
|
|
—
|
|
|
2,500
|
|
|||
Total adjustments
|
6,391
|
|
|
13,034
|
|
|
35,171
|
|
|||
Adjusted pre-tax (loss)/income
|
(10,696
|
)
|
|
60,276
|
|
|
43,598
|
|
|||
Normalized income tax
|
2,246
|
|
|
(12,998
|
)
|
|
(7,653
|
)
|
|||
Equity in net loss of affiliate
|
(343
|
)
|
|
(62
|
)
|
|
—
|
|
|||
Non-controlling interest
|
(620
|
)
|
|
(2,140
|
)
|
|
(1,660
|
)
|
|||
Adjusted net (loss)/income (non-GAAP)
|
$
|
(9,413
|
)
|
|
$
|
45,076
|
|
|
$
|
34,285
|
|
|
|
|
|
|
|
||||||
Adjusted (loss)/earnings per common share (non-GAAP):
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
0.93
|
|
|
$
|
0.72
|
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.92
|
|
|
$
|
0.71
|
|
|
Key Operating Metrics
|
||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Retail
|
|
|
|
|
|
|
|
|
|
||||||||||
OTC Trading Volume (billions)
|
$
|
2,473.6
|
|
|
$
|
2,822.0
|
|
|
$
|
3,985.8
|
|
|
$
|
2,430.5
|
|
|
$
|
1,796.7
|
|
OTC Average Daily Volume (billions)
|
$
|
9.6
|
|
|
$
|
10.9
|
|
|
$
|
15.4
|
|
|
$
|
9.4
|
|
|
$
|
6.9
|
|
Active OTC Accounts
(1) (2)
|
132,262
|
|
|
126,528
|
|
|
142,836
|
|
|
91,328
|
|
|
93,143
|
|
|||||
Client Assets (millions)
|
$
|
749.6
|
|
|
$
|
599.5
|
|
|
$
|
675.6
|
|
|
$
|
563.2
|
|
|
$
|
592.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Institutional
|
|
|
|
|
|
|
|
|
|
||||||||||
ECN Volume (billions)
|
$
|
2,979.6
|
|
|
$
|
2,180.7
|
|
|
$
|
1,865.1
|
|
|
$
|
1,498.6
|
|
|
$
|
1,127.9
|
|
ECN Average Daily Volume (billions)
|
$
|
11.5
|
|
|
$
|
8.4
|
|
|
$
|
7.2
|
|
|
$
|
5.8
|
|
|
$
|
4.3
|
|
Swap Dealer Volume (billions)
|
$
|
720.5
|
|
|
$
|
779.4
|
|
|
$
|
806.8
|
|
|
$
|
1,685.1
|
|
|
1,471.7
|
|
|
Swap Dealer Average Daily Volume (billions)
|
$
|
2.8
|
|
|
$
|
3.0
|
|
|
$
|
3.1
|
|
|
$
|
6.5
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Futures
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of Futures Contracts
(3)
|
6,857,870
|
|
|
8,304,376
|
|
|
8,623,392
|
|
|
7,027,008
|
|
|
5,386,383
|
|
|||||
Futures Average Daily Contracts
|
27,322
|
|
|
32,954
|
|
|
34,356
|
|
|
28,108
|
|
|
21,460
|
|
|||||
Active Futures Accounts
(1)
|
7,838
|
|
|
8,368
|
|
|
8,668
|
|
|
8,184
|
|
|
7,064
|
|
|||||
Client Assets (millions)
|
$
|
229.2
|
|
|
$
|
346.0
|
|
|
$
|
245.0
|
|
|
$
|
196.4
|
|
|
$
|
146.4
|
|
(1)
|
Represents accounts which executed a transaction over the last 12 months.
|
(2)
|
We have updated our historical active account disclosures to reflect a change in definition for certain accounts.
|
(3)
|
Futures contracts represent the total number of contracts transacted by customers of our futures business.
|
•
|
overall economic conditions and outlook;
|
•
|
volatility of financial markets;
|
•
|
legislative changes; and
|
•
|
regulatory changes.
|
•
|
the effectiveness of our sales activities;
|
•
|
the competitiveness of our products and services;
|
•
|
the effectiveness of our customer service team; and
|
•
|
the effectiveness of our marketing activities.
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
$
|
231,100
|
|
|
$
|
330,744
|
|
|
$
|
(99,644
|
)
|
|
(30.1
|
)%
|
Institutional revenue
|
30,136
|
|
|
29,030
|
|
|
1,106
|
|
|
3.8
|
%
|
|||
Futures revenue
|
37,964
|
|
|
47,430
|
|
|
(9,466
|
)
|
|
(20.0
|
)%
|
|||
Other revenue
|
4,478
|
|
|
3,504
|
|
|
974
|
|
|
27.8
|
%
|
|||
Total non-interest revenue
|
303,678
|
|
|
410,708
|
|
|
(107,030
|
)
|
|
(26.1
|
)%
|
|||
Interest revenue
|
5,829
|
|
|
1,669
|
|
|
4,160
|
|
|
249.3
|
%
|
|||
Interest expense
|
883
|
|
|
552
|
|
|
331
|
|
|
60.0
|
%
|
|||
Total net interest revenue
|
4,946
|
|
|
1,117
|
|
|
3,829
|
|
|
342.8
|
%
|
|||
Net revenue
|
$
|
308,624
|
|
|
$
|
411,825
|
|
|
$
|
(103,201
|
)
|
|
(25.1
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Employee compensation and benefits
|
$
|
95,218
|
|
|
$
|
101,904
|
|
|
$
|
(6,686
|
)
|
|
(6.6
|
)%
|
Selling and marketing
|
31,200
|
|
|
28,742
|
|
|
2,458
|
|
|
8.6
|
%
|
|||
Referral fees
|
53,671
|
|
|
70,752
|
|
|
(17,081
|
)
|
|
(24.1
|
)%
|
|||
Trading expenses
|
29,041
|
|
|
31,159
|
|
|
(2,118
|
)
|
|
(6.8
|
)%
|
|||
General and administrative
|
45,727
|
|
|
55,036
|
|
|
(9,309
|
)
|
|
(16.9
|
)%
|
|||
Depreciation and amortization
|
17,907
|
|
|
13,905
|
|
|
4,002
|
|
|
28.8
|
%
|
|||
Purchased intangible amortization
|
16,110
|
|
|
15,016
|
|
|
1,094
|
|
|
7.3
|
%
|
|||
Communications and technology
|
19,699
|
|
|
20,460
|
|
|
(761
|
)
|
|
(3.7
|
)%
|
|||
Bad debt provision
|
(247
|
)
|
|
4,154
|
|
|
(4,401
|
)
|
|
(105.9
|
)%
|
|||
Restructuring expenses
|
—
|
|
|
1,041
|
|
|
(1,041
|
)
|
|
(100.0
|
)%
|
|||
Integration expenses
|
—
|
|
|
2,788
|
|
|
(2,788
|
)
|
|
(100.0
|
)%
|
|||
Legal settlement
|
—
|
|
|
9,205
|
|
|
(9,205
|
)
|
|
(100.0
|
)%
|
|||
Impairment of investment
|
620
|
|
|
—
|
|
|
620
|
|
|
100.0
|
%
|
|||
Total operating expense
|
308,946
|
|
|
354,162
|
|
|
(45,216
|
)
|
|
(12.8
|
)%
|
|||
OPERATING (LOSS)/PROFIT
|
(322
|
)
|
|
57,663
|
|
|
(57,985
|
)
|
|
(100.6
|
)%
|
|||
Interest expense on long term borrowings
|
11,821
|
|
|
10,421
|
|
|
1,400
|
|
|
13.4
|
%
|
|||
Loss on extinguishment of debt
|
4,944
|
|
|
—
|
|
|
4,944
|
|
|
100.0
|
%
|
|||
(LOSS)/INCOME BEFORE INCOME TAX (BENEFIT)/EXPENSE
|
(17,087
|
)
|
|
47,242
|
|
|
(64,329
|
)
|
|
(136.2
|
)%
|
|||
Income tax (benefit)/expense
|
$
|
(6,855
|
)
|
|
$
|
9,768
|
|
|
$
|
(16,623
|
)
|
|
(170.2
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
237,418
|
|
|
$
|
336,353
|
|
|
$
|
(98,935
|
)
|
|
(29.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
60,887
|
|
|
62,423
|
|
|
(1,536
|
)
|
|
(2.5
|
)%
|
|||
Selling and marketing
|
29,929
|
|
|
27,666
|
|
|
2,263
|
|
|
8.2
|
%
|
|||
Referral fees
|
39,711
|
|
|
55,080
|
|
|
(15,369
|
)
|
|
(27.9
|
)%
|
|||
Other operating expenses
|
61,735
|
|
|
75,488
|
|
|
(13,753
|
)
|
|
(18.2
|
)%
|
|||
Segment profit
|
$
|
45,156
|
|
|
$
|
115,696
|
|
|
$
|
(70,540
|
)
|
|
(61.0
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
31,155
|
|
|
$
|
30,219
|
|
|
$
|
936
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
13,887
|
|
|
14,424
|
|
|
(537
|
)
|
|
(3.7
|
)%
|
|||
Selling and marketing
|
86
|
|
|
103
|
|
|
(17
|
)
|
|
(16.5
|
)%
|
|||
Other operating expenses
|
12,274
|
|
|
10,342
|
|
|
1,932
|
|
|
18.7
|
%
|
|||
Segment profit
|
$
|
4,908
|
|
|
$
|
5,350
|
|
|
$
|
(442
|
)
|
|
(8.3
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
40,291
|
|
|
$
|
48,084
|
|
|
$
|
(7,793
|
)
|
|
(16.2
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
9,387
|
|
|
11,967
|
|
|
(2,580
|
)
|
|
(21.6
|
)%
|
|||
Selling and marketing
|
786
|
|
|
972
|
|
|
(186
|
)
|
|
(19.1
|
)%
|
|||
Referral fees
|
13,960
|
|
|
15,672
|
|
|
(1,712
|
)
|
|
(10.9
|
)%
|
|||
Other operating expenses
|
12,931
|
|
|
14,769
|
|
|
(1,838
|
)
|
|
(12.4
|
)%
|
|||
Segment profit
|
$
|
3,227
|
|
|
$
|
4,704
|
|
|
$
|
(1,477
|
)
|
|
(31.4
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Other revenue
|
$
|
(240
|
)
|
|
$
|
(2,831
|
)
|
|
$
|
2,591
|
|
|
(91.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
11,057
|
|
|
13,090
|
|
|
(2,033
|
)
|
|
(15.5
|
)%
|
|||
Selling and marketing
|
399
|
|
|
1
|
|
|
398
|
|
|
NM
|
|
|||
Other operating expenses
|
6,453
|
|
|
10,210
|
|
|
(3,757
|
)
|
|
(36.8
|
)%
|
|||
Loss
|
$
|
(18,149
|
)
|
|
$
|
(26,132
|
)
|
|
$
|
7,983
|
|
|
(30.5
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
REVENUE:
|
|
|
|
|
|
|
|
|||||||
Retail revenue
|
$
|
330,744
|
|
|
$
|
347,489
|
|
|
$
|
(16,745
|
)
|
|
(4.8
|
)%
|
Institutional revenue
|
29,030
|
|
|
33,773
|
|
|
(4,743
|
)
|
|
(14.0
|
)%
|
|||
Futures revenue
|
47,430
|
|
|
45,427
|
|
|
2,003
|
|
|
4.4
|
%
|
|||
Other revenue
|
3,504
|
|
|
8,487
|
|
|
(4,983
|
)
|
|
(58.7
|
)%
|
|||
Total non-interest revenue
|
410,708
|
|
|
435,176
|
|
|
(24,468
|
)
|
|
(5.6
|
)%
|
|||
Interest revenue
|
1,669
|
|
|
1,220
|
|
|
449
|
|
|
36.8
|
%
|
|||
Interest expense
|
552
|
|
|
1,049
|
|
|
(497
|
)
|
|
(47.4
|
)%
|
|||
Total net interest revenue
|
1,117
|
|
|
171
|
|
|
946
|
|
|
553.2
|
%
|
|||
Net revenue
|
$
|
411,825
|
|
|
$
|
435,347
|
|
|
$
|
(23,522
|
)
|
|
(5.4
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Employee compensation and benefits
|
$
|
101,904
|
|
|
$
|
106,581
|
|
|
$
|
(4,677
|
)
|
|
(4.4
|
)%
|
Selling and marketing
|
28,742
|
|
|
27,168
|
|
|
1,574
|
|
|
5.8
|
%
|
|||
Referral fees
|
70,752
|
|
|
103,523
|
|
|
(32,771
|
)
|
|
(31.7
|
)%
|
|||
Trading expenses
|
31,159
|
|
|
31,914
|
|
|
(755
|
)
|
|
(2.4
|
)%
|
|||
General and administrative
|
55,036
|
|
|
55,067
|
|
|
(31
|
)
|
|
(0.1
|
)%
|
|||
Depreciation and amortization
|
13,905
|
|
|
11,111
|
|
|
2,794
|
|
|
25.1
|
%
|
|||
Purchased intangible amortization
|
15,016
|
|
|
16,550
|
|
|
(1,534
|
)
|
|
(9.3
|
)%
|
|||
Communications and technology
|
20,460
|
|
|
18,929
|
|
|
1,531
|
|
|
8.1
|
%
|
|||
Bad debt provision
|
4,154
|
|
|
7,462
|
|
|
(3,308
|
)
|
|
(44.3
|
)%
|
|||
Acquisition expenses
|
—
|
|
|
2,819
|
|
|
(2,819
|
)
|
|
(100.0
|
)%
|
|||
Restructuring expenses
|
1,041
|
|
|
3,482
|
|
|
(2,441
|
)
|
|
(70.1
|
)%
|
|||
Integration expenses
|
2,788
|
|
|
33,092
|
|
|
(30,304
|
)
|
|
(91.6
|
)%
|
|||
Legal settlement
|
9,205
|
|
|
—
|
|
|
9,205
|
|
|
100.0
|
%
|
|||
Total operating expense
|
354,162
|
|
|
417,698
|
|
|
(63,536
|
)
|
|
(15.2
|
)%
|
|||
OPERATING PROFIT
|
57,663
|
|
|
17,649
|
|
|
40,014
|
|
|
226.7
|
%
|
|||
Interest expense on long term borrowings
|
10,421
|
|
|
9,222
|
|
|
1,199
|
|
|
13.0
|
%
|
|||
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)
|
47,242
|
|
|
8,427
|
|
|
38,815
|
|
|
460.6
|
%
|
|||
Income tax expense/(benefit)
|
$
|
9,768
|
|
|
$
|
(3,512
|
)
|
|
$
|
13,280
|
|
|
(378.1
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
336,353
|
|
|
$
|
351,472
|
|
|
$
|
(15,119
|
)
|
|
(4.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
62,423
|
|
|
67,515
|
|
|
(5,092
|
)
|
|
(7.5
|
)%
|
|||
Selling and marketing
|
27,666
|
|
|
26,129
|
|
|
1,537
|
|
|
5.9
|
%
|
|||
Referral fees
|
55,080
|
|
|
87,175
|
|
|
(32,095
|
)
|
|
(36.8
|
)%
|
|||
Other operating expenses
|
75,488
|
|
|
76,301
|
|
|
(813
|
)
|
|
(1.1
|
)%
|
|||
Segment profit
|
$
|
115,696
|
|
|
$
|
94,352
|
|
|
$
|
21,344
|
|
|
22.6
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
30,219
|
|
|
$
|
35,072
|
|
|
$
|
(4,853
|
)
|
|
(13.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
14,424
|
|
|
15,305
|
|
|
(881
|
)
|
|
(5.8
|
)%
|
|||
Selling and marketing
|
103
|
|
|
138
|
|
|
(35
|
)
|
|
(25.4
|
)%
|
|||
Other operating expenses
|
10,342
|
|
|
9,573
|
|
|
769
|
|
|
8.0
|
%
|
|||
Segment profit
|
$
|
5,350
|
|
|
$
|
10,056
|
|
|
$
|
(4,706
|
)
|
|
(46.8
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Net revenue
|
$
|
48,084
|
|
|
$
|
45,797
|
|
|
$
|
2,287
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
11,967
|
|
|
10,634
|
|
|
1,333
|
|
|
12.5
|
%
|
|||
Selling and marketing
|
972
|
|
|
901
|
|
|
71
|
|
|
7.9
|
%
|
|||
Referral fees
|
15,672
|
|
|
16,348
|
|
|
(676
|
)
|
|
(4.1
|
)%
|
|||
Other operating expenses
|
14,769
|
|
|
13,960
|
|
|
809
|
|
|
5.8
|
%
|
|||
Segment profit
|
$
|
4,704
|
|
|
$
|
3,954
|
|
|
$
|
750
|
|
|
19.0
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
Other revenue
|
$
|
(2,831
|
)
|
|
$
|
(3,716
|
)
|
|
$
|
885
|
|
|
(23.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Employee compensation and benefits
|
13,090
|
|
|
13,127
|
|
|
(37
|
)
|
|
(0.3
|
)%
|
|||
Selling and marketing
|
1
|
|
|
—
|
|
|
1
|
|
|
100.0
|
%
|
|||
Other operating expenses
|
10,210
|
|
|
11,038
|
|
|
(828
|
)
|
|
(7.5
|
)%
|
|||
Loss
|
$
|
(26,132
|
)
|
|
$
|
(27,881
|
)
|
|
$
|
1,749
|
|
|
(6.3
|
)%
|
Entity Name
|
Minimum
Regulatory Capital Requirements |
|
Capital
Levels Maintained |
|
Excess
Net Capital |
||||||
GAIN Capital Group, LLC
|
$
|
34.7
|
|
|
$
|
48.0
|
|
|
$
|
13.3
|
|
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|||
GAIN Capital U.K., Ltd.
|
69.7
|
|
|
208.1
|
|
|
138.4
|
|
|||
GAIN Capital Japan Co., Ltd.
|
1.5
|
|
|
9.0
|
|
|
7.5
|
|
|||
GAIN Capital Australia, Pty. Ltd.
|
0.8
|
|
|
4.7
|
|
|
3.9
|
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
4.7
|
|
|
2.8
|
|
|||
GAIN Global Markets, Inc.
|
1.6
|
|
|
2.4
|
|
|
0.8
|
|
|||
GAIN Capital-Forex.com Canada, Ltd.
|
0.2
|
|
|
1.7
|
|
|
1.5
|
|
|||
GAIN Capital Singapore Pte., Ltd.
|
0.6
|
|
|
6.0
|
|
|
5.4
|
|
|||
Trade Facts, Ltd.
|
0.6
|
|
|
3.2
|
|
|
2.6
|
|
|||
Global Asset Advisors, LLC
|
—
|
|
|
1.8
|
|
|
1.8
|
|
|||
GAIN Capital Payments Ltd.
|
0.2
|
|
|
0.4
|
|
|
0.2
|
|
|||
GTX SEF, LLC
|
1.0
|
|
|
1.4
|
|
|
0.4
|
|
|||
Total
|
$
|
112.9
|
|
|
$
|
291.8
|
|
|
$
|
178.9
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
209.7
|
|
|
$
|
234.8
|
|
Receivables from brokers
|
78.5
|
|
|
61.1
|
|
||
Revolving credit facility (undrawn)
|
50.0
|
|
|
—
|
|
||
Net operating cash
|
338.2
|
|
|
295.9
|
|
||
Less: Minimum regulatory requirements
|
(112.9
|
)
|
|
(113.0
|
)
|
||
Less: Payables to brokers
|
(2.8
|
)
|
|
—
|
|
||
Less: Convertible senior notes due 2018
|
(6.4
|
)
|
|
—
|
|
||
Liquidity
(1)
|
$
|
216.1
|
|
|
$
|
182.9
|
|
(1)
|
Our Convertible Senior Notes due
2020
and
2022
are excluded given their long-dated maturity
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
$
|
11,131
|
|
|
$
|
124,839
|
|
|
$
|
77,213
|
|
Net cash used in investing activities
|
(28,114
|
)
|
|
(31,327
|
)
|
|
(16,081
|
)
|
|||
Net cash used in financing activities
|
(21,530
|
)
|
|
(21,175
|
)
|
|
(25,840
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
13,441
|
|
|
(9,465
|
)
|
|
(2,755
|
)
|
|||
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
|
$
|
(25,072
|
)
|
|
$
|
62,872
|
|
|
$
|
32,537
|
|
|
|
|
Less than
|
|
1-3
|
|
3-5
|
|
More than
|
||||||||||
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
5 Years
|
||||||||||
Purchase Obligations
|
$
|
24,265
|
|
|
$
|
16,997
|
|
|
$
|
7,268
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating Leases
|
25,162
|
|
|
5,191
|
|
|
7,133
|
|
|
7,505
|
|
|
5,333
|
|
|||||
Total
|
$
|
49,427
|
|
|
$
|
22,188
|
|
|
$
|
14,401
|
|
|
$
|
7,505
|
|
|
$
|
5,333
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Reports of Independent Registered Public Accounting Firms
|
F-2
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
F-4
|
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2017, 2016 and 2015
|
F-5
|
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2017, 2016 and 2015
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015
|
F-8
|
Notes to Consolidated Financial Statements
|
F-10
|
Schedule I - Condensed Financial Information of GAIN Capital Holdings, Inc., (Parent Company Only) as of December 31, 2017 and 2016 and for the Years ended December 31, 2017, 2016, and 2015
|
F-58
|
Consolidated Financial Statements:
|
|
Reports of Independent Registered Public Accounting Firms
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2017, 2016, and 2015
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016, and 2015
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Financial Statement Schedule:
|
|
Schedule I - Condensed Financial Information of GAIN Capital Holdings, Inc. (Parent Company Only) as of December 31, 2017 and 2016 and for the Years ended December 31, 2017, 2016 and 2015
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
209,688
|
|
|
$
|
234,760
|
|
Cash and securities held for customers
|
978,828
|
|
|
945,468
|
|
||
Receivables from brokers
|
78,503
|
|
|
61,096
|
|
||
Property and equipment, net
|
40,742
|
|
|
36,462
|
|
||
Intangible assets, net
|
61,969
|
|
|
67,358
|
|
||
Goodwill
|
33,036
|
|
|
32,107
|
|
||
Other assets
|
45,881
|
|
|
52,833
|
|
||
Total assets
|
$
|
1,448,647
|
|
|
$
|
1,430,084
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Payables to customers
|
$
|
978,828
|
|
|
$
|
945,468
|
|
Payables to brokers
|
2,789
|
|
|
—
|
|
||
Accrued compensation and benefits
|
10,104
|
|
|
13,559
|
|
||
Accrued expenses and other liabilities
|
33,947
|
|
|
41,547
|
|
||
Income tax payable
|
599
|
|
|
3,965
|
|
||
Convertible senior notes
|
132,221
|
|
|
124,769
|
|
||
Total liabilities
|
$
|
1,158,488
|
|
|
$
|
1,129,308
|
|
Commitments and contingent liabilities
|
|
|
|
||||
Redeemable non-controlling interests
|
$
|
4,411
|
|
|
$
|
6,594
|
|
Shareholders’ equity
|
|
|
|
||||
Common stock ($0.00001 par value; 120 million shares authorized, 53,612,340 shares issued and 45,152,299 shares outstanding as of December 31, 2017; 120 million shares authorized, 52,848,811 shares issued and 48,220,243 shares outstanding as of December 31, 2016)
|
$
|
—
|
|
|
$
|
—
|
|
Additional paid-in capital
|
235,659
|
|
|
218,392
|
|
||
Retained earnings
|
122,686
|
|
|
143,399
|
|
||
Accumulated other comprehensive loss
|
(15,670
|
)
|
|
(36,842
|
)
|
||
Treasury stock, at cost (8,460,041 shares at December 31, 2017 and 4,628,568 at December 31, 2016, respectively)
|
(56,927
|
)
|
|
(30,767
|
)
|
||
Total shareholders’ equity
|
285,748
|
|
|
294,182
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,448,647
|
|
|
$
|
1,430,084
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Retail revenue
|
$
|
231,100
|
|
|
$
|
330,744
|
|
|
$
|
347,489
|
|
Institutional revenue
|
30,136
|
|
|
29,030
|
|
|
33,773
|
|
|||
Futures revenue
|
37,964
|
|
|
47,430
|
|
|
45,427
|
|
|||
Other revenue
|
4,478
|
|
|
3,504
|
|
|
8,487
|
|
|||
Total non-interest revenue
|
303,678
|
|
|
410,708
|
|
|
435,176
|
|
|||
Interest revenue
|
5,829
|
|
|
1,669
|
|
|
1,220
|
|
|||
Interest expense
|
883
|
|
|
552
|
|
|
1,049
|
|
|||
Total net interest revenue
|
4,946
|
|
|
1,117
|
|
|
171
|
|
|||
Net revenue
|
$
|
308,624
|
|
|
$
|
411,825
|
|
|
$
|
435,347
|
|
EXPENSES:
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
$
|
95,218
|
|
|
$
|
101,904
|
|
|
$
|
106,581
|
|
Selling and marketing
|
31,200
|
|
|
28,742
|
|
|
27,168
|
|
|||
Referral fees
|
53,671
|
|
|
70,752
|
|
|
103,523
|
|
|||
Trading expenses
|
29,041
|
|
|
31,159
|
|
|
31,914
|
|
|||
General and administrative
|
45,727
|
|
|
55,036
|
|
|
55,067
|
|
|||
Depreciation and amortization
|
17,907
|
|
|
13,905
|
|
|
11,111
|
|
|||
Purchased intangible amortization
|
16,110
|
|
|
15,016
|
|
|
16,550
|
|
|||
Communications and technology
|
19,699
|
|
|
20,460
|
|
|
18,929
|
|
|||
Bad debt provision
|
(247
|
)
|
|
4,154
|
|
|
7,462
|
|
|||
Acquisition expenses
|
—
|
|
|
—
|
|
|
2,819
|
|
|||
Restructuring expenses
|
—
|
|
|
1,041
|
|
|
3,482
|
|
|||
Integration expenses
|
—
|
|
|
2,788
|
|
|
33,092
|
|
|||
Legal settlement
|
—
|
|
|
9,205
|
|
|
—
|
|
|||
Impairment of investment
|
620
|
|
|
—
|
|
|
—
|
|
|||
Total operating expense
|
308,946
|
|
|
354,162
|
|
|
417,698
|
|
|||
OPERATING (LOSS)/PROFIT
|
(322
|
)
|
|
57,663
|
|
|
17,649
|
|
|||
Interest expense on long term borrowings
|
11,821
|
|
|
10,421
|
|
|
9,222
|
|
|||
Loss on extinguishment of debt
|
4,944
|
|
|
—
|
|
|
—
|
|
|||
(LOSS)/INCOME BEFORE INCOME TAX (BENEFIT)/EXPENSE
|
(17,087
|
)
|
|
47,242
|
|
|
8,427
|
|
|||
Income tax (benefit)/expense
|
(6,855
|
)
|
|
9,768
|
|
|
(3,512
|
)
|
|||
Equity in net loss of affiliate
|
(343
|
)
|
|
(62
|
)
|
|
—
|
|
|||
NET (LOSS)/INCOME
|
(10,575
|
)
|
|
37,412
|
|
|
11,939
|
|
|||
Net income attributable to non-controlling interest
|
620
|
|
|
2,140
|
|
|
1,660
|
|
|||
NET (LOSS)/INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
(11,195
|
)
|
|
35,272
|
|
|
10,279
|
|
|||
Other comprehensive income/(loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
21,172
|
|
|
(30,977
|
)
|
|
(4,352
|
)
|
|||
COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
$
|
9,977
|
|
|
$
|
4,295
|
|
|
$
|
5,927
|
|
(Loss)/earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
Weighted average common shares outstanding used in computing (loss)/earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
46,740,097
|
|
|
48,588,917
|
|
|
47,601,979
|
|
|||
Diluted
|
46,740,097
|
|
|
48,785,674
|
|
|
48,379,051
|
|
|
Common Stock |
|
Treasury
Stock |
|
Additional
Paid in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income |
|
Total
|
|||||||||||||||
|
Shares
(1)
|
|
Amount
|
|
||||||||||||||||||||||
BALANCE—January 1, 2015
|
42,934,559
|
|
|
$
|
—
|
|
|
$
|
(16,720
|
)
|
|
$
|
148,378
|
|
|
$
|
119,775
|
|
|
$
|
(1,513
|
)
|
|
$
|
249,920
|
|
Net income applicable to GAIN Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,279
|
|
|
—
|
|
|
10,279
|
|
||||||
Exercise of options
|
638,241
|
|
|
—
|
|
|
—
|
|
|
2,386
|
|
|
—
|
|
|
—
|
|
|
2,386
|
|
||||||
Issuance of common stock
|
5,319,149
|
|
|
—
|
|
|
—
|
|
|
45,100
|
|
|
—
|
|
|
—
|
|
|
45,100
|
|
||||||
Conversion of restricted stock into common stock
|
440,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock for the employee stock purchase plan
|
92,777
|
|
|
—
|
|
|
—
|
|
|
789
|
|
|
—
|
|
|
—
|
|
|
789
|
|
||||||
Purchase of treasury stock
|
(654,362
|
)
|
|
—
|
|
|
(5,088
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,088
|
)
|
||||||
Shares withheld for net settlements of share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
3,680
|
|
|
—
|
|
|
—
|
|
|
3,680
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
|
1,140
|
|
||||||
Convertible note issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
||||||
Tax effect of debt discount on convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,840
|
)
|
|
—
|
|
|
—
|
|
|
(3,840
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
||||||
Adjustment to the redemption value of put options related to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
|
308
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,530
|
)
|
|
—
|
|
|
(9,530
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,352
|
)
|
|
(4,352
|
)
|
||||||
BALANCE—December 31, 2015
|
48,771,015
|
|
|
$
|
—
|
|
|
$
|
(21,808
|
)
|
|
$
|
212,981
|
|
|
$
|
120,776
|
|
|
$
|
(5,865
|
)
|
|
$
|
306,084
|
|
Net income applicable to GAIN Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,272
|
|
|
—
|
|
|
35,272
|
|
||||||
Exercise of options
|
179,501
|
|
|
—
|
|
|
—
|
|
|
706
|
|
|
—
|
|
|
—
|
|
|
706
|
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Conversion of restricted stock into common stock
|
500,253
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock for the employee stock purchase plan
|
96,173
|
|
|
—
|
|
|
—
|
|
|
611
|
|
|
—
|
|
|
—
|
|
|
611
|
|
||||||
Purchase of treasury stock
|
(1,317,369
|
)
|
|
—
|
|
|
(8,894
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,894
|
)
|
||||||
Shares withheld for net settlements of share-based awards
|
(9,330
|
)
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
4,151
|
|
|
—
|
|
|
—
|
|
|
4,151
|
|
||||||
Tax effect of debt discount on convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
||||||
Repurchase of convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
||||||
Adjustment to the redemption value of put options related to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,715
|
)
|
|
—
|
|
|
(2,715
|
)
|
||||||
Adjustment to fair value of redeemable non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|
—
|
|
|
258
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,192
|
)
|
|
—
|
|
|
(10,192
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,977
|
)
|
|
(30,977
|
)
|
BALANCE—December 31, 2016
|
48,220,243
|
|
|
$
|
—
|
|
|
$
|
(30,767
|
)
|
|
$
|
218,392
|
|
|
$
|
143,399
|
|
|
$
|
(36,842
|
)
|
|
$
|
294,182
|
|
Net loss applicable to GAIN Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,195
|
)
|
|
—
|
|
|
(11,195
|
)
|
||||||
Exercise of options
|
88,427
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
—
|
|
|
—
|
|
|
356
|
|
||||||
Conversion of restricted stock into common stock
|
572,060
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock for the employee stock purchase plan
|
103,042
|
|
|
—
|
|
|
—
|
|
|
642
|
|
|
—
|
|
|
—
|
|
|
642
|
|
||||||
Purchase of treasury stock
|
(3,776,283
|
)
|
|
—
|
|
|
(25,778
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,778
|
)
|
||||||
Shares withheld for net settlements of share-based awards
|
(55,190
|
)
|
|
—
|
|
|
(382
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(382
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
5,093
|
|
|
—
|
|
|
—
|
|
|
5,093
|
|
||||||
Recognition of debt discount on convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
18,399
|
|
|
—
|
|
|
—
|
|
|
18,399
|
|
||||||
Tax effect of debt discount on convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,037
|
)
|
|
—
|
|
|
—
|
|
|
(7,037
|
)
|
||||||
Repurchase of convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
||||||
Adjustment to the redemption value of put options related to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,656
|
|
|
—
|
|
|
1,656
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,174
|
)
|
|
—
|
|
|
(11,174
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,172
|
|
|
21,172
|
|
||||||
BALANCE—December 31, 2017
|
45,152,299
|
|
|
$
|
—
|
|
|
$
|
(56,927
|
)
|
|
$
|
235,659
|
|
|
$
|
122,686
|
|
|
$
|
(15,670
|
)
|
|
$
|
285,748
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net (loss)/income
|
$
|
(10,575
|
)
|
|
$
|
37,412
|
|
|
$
|
11,939
|
|
Adjustments to reconcile net (loss)/income to cash provided by operating activities
|
|
|
|
|
|
||||||
(Gain)/loss on foreign currency exchange rates
|
(719
|
)
|
|
1,692
|
|
|
2,432
|
|
|||
Depreciation and amortization
|
34,017
|
|
|
28,921
|
|
|
27,661
|
|
|||
Non-cash integration costs
|
—
|
|
|
366
|
|
|
26,827
|
|
|||
Deferred tax benefit
|
(2,630
|
)
|
|
(3,481
|
)
|
|
(12,355
|
)
|
|||
Amortization of deferred financing costs
|
495
|
|
|
442
|
|
|
354
|
|
|||
Bad debt provision
|
(247
|
)
|
|
4,154
|
|
|
7,462
|
|
|||
Convertible senior notes discount amortization
|
4,917
|
|
|
4,311
|
|
|
3,624
|
|
|||
Share-based compensation
|
5,093
|
|
|
4,151
|
|
|
3,680
|
|
|||
Loss/(gain) on extinguishment of debt
|
4,944
|
|
|
(89
|
)
|
|
—
|
|
|||
Equity in net loss of affiliate
|
343
|
|
|
62
|
|
|
—
|
|
|||
Adjustment to fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(6,722
|
)
|
|||
Impairment of cost basis investment
|
620
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Cash and securities held for customers
|
5,352
|
|
|
(77,216
|
)
|
|
101,325
|
|
|||
Receivables from brokers
|
(17,549
|
)
|
|
58,360
|
|
|
45,576
|
|
|||
Payables to brokers
|
2,789
|
|
|
—
|
|
|
—
|
|
|||
Other assets
|
5,872
|
|
|
(13,079
|
)
|
|
(7,674
|
)
|
|||
Payables to dealers, FCM’s, customers
|
(5,352
|
)
|
|
77,216
|
|
|
(101,325
|
)
|
|||
Accrued compensation and benefits
|
(3,942
|
)
|
|
2,045
|
|
|
(7,454
|
)
|
|||
Accrued expenses and other liabilities
|
(10,059
|
)
|
|
(6,703
|
)
|
|
(18,748
|
)
|
|||
Income tax payable
|
(2,238
|
)
|
|
6,275
|
|
|
611
|
|
|||
Net cash provided by operating activities
|
11,131
|
|
|
124,839
|
|
|
77,213
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(20,930
|
)
|
|
(23,883
|
)
|
|
(19,676
|
)
|
|||
Purchase of partial interest in GAA/TT
|
—
|
|
|
(7,444
|
)
|
|
—
|
|
|||
Acquisition of FXCM assets
|
(7,184
|
)
|
|
—
|
|
|
—
|
|
|||
Funding of acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(3,258
|
)
|
|||
Cash received relating to acquisitions
|
—
|
|
|
—
|
|
|
7,612
|
|
|||
Purchase of investment
|
—
|
|
|
—
|
|
|
(759
|
)
|
|||
Net cash used in investing activities
|
(28,114
|
)
|
|
(31,327
|
)
|
|
(16,081
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Contractual payments for acquisitions
|
—
|
|
|
—
|
|
|
(13,893
|
)
|
|||
Proceeds from exercise of stock options
|
356
|
|
|
706
|
|
|
2,386
|
|
|||
Proceeds from employee stock purchase plan
|
642
|
|
|
611
|
|
|
789
|
|
|||
Purchase of treasury stock
|
(26,160
|
)
|
|
(8,959
|
)
|
|
(5,088
|
)
|
|||
Excess tax benefit from employee stock option exercises
|
—
|
|
|
—
|
|
|
1,140
|
|
|||
Dividend payments
|
(11,174
|
)
|
|
(10,192
|
)
|
|
(9,530
|
)
|
|||
Distributions to non-controlling interest holders
|
(1,147
|
)
|
|
(1,605
|
)
|
|
(1,644
|
)
|
|||
Convertible note issuance, net of commissions
|
89,010
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of convertible notes
|
(73,057
|
)
|
|
(1,736
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
$
|
(21,530
|
)
|
|
$
|
(21,175
|
)
|
|
$
|
(25,840
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
13,441
|
|
|
(9,465
|
)
|
|
(2,755
|
)
|
|||
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
|
(25,072
|
)
|
|
62,872
|
|
|
32,537
|
|
|||
CASH AND CASH EQUIVALENTS—Beginning of year
|
$
|
234,760
|
|
|
$
|
171,888
|
|
|
$
|
139,351
|
|
CASH AND CASH EQUIVALENTS—End of year
|
$
|
209,688
|
|
|
$
|
234,760
|
|
|
$
|
171,888
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
5,660
|
|
|
$
|
6,251
|
|
|
$
|
5,065
|
|
Income taxes
|
$
|
4,512
|
|
|
$
|
8,438
|
|
|
$
|
9,861
|
|
Non-cash financing activities:
|
|
|
|
|
|
||||||
Common stock issued as consideration for business acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,100
|
|
Convertible senior notes issued as consideration for business acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,000
|
|
Deferred taxes related to convertible senior notes issued
|
$
|
(7,037
|
)
|
|
$
|
—
|
|
|
$
|
(3,840
|
)
|
Adjustment to the redemption value of put options related to non-controlling interests
|
$
|
1,656
|
|
|
$
|
(2,715
|
)
|
|
$
|
308
|
|
•
|
Valuation of assets and liabilities requiring fair value estimates;
|
•
|
The allowance for doubtful accounts;
|
•
|
The realization of deferred taxes;
|
•
|
The carrying amount of goodwill and other intangible assets;
|
•
|
The useful lives of intangible assets and other long-lived assets with finite lives;
|
•
|
Incentive based compensation accruals and valuation of share-based payment arrangements;
|
•
|
The recognition and measurement of uncertain tax positions; and
|
•
|
Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements.
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2017 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets (Liabilities):
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
$
|
219,286
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
219,286
|
|
Cash and securities held for customers:
|
|
|
|
|
|
|
|
||||||||
US treasury bills: U.S. government and agency securities
|
105,190
|
|
|
—
|
|
|
—
|
|
|
105,190
|
|
||||
Receivable from brokers:
|
|
|
|
|
|
|
|
||||||||
Broker derivative contracts
|
—
|
|
|
4,966
|
|
|
—
|
|
|
4,966
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||
Other
|
130
|
|
|
—
|
|
|
—
|
|
|
130
|
|
||||
Payables to customers:
|
|
|
|
|
|
|
|
||||||||
Customer derivative contracts
|
—
|
|
|
129,966
|
|
|
$
|
—
|
|
|
129,966
|
|
|||
Payables to brokers:
|
|
|
|
|
|
|
|
||||||||
Broker derivative contracts
|
|
|
(3,170
|
)
|
|
|
|
(3,170
|
)
|
||||||
Total
|
$
|
324,781
|
|
|
$
|
131,762
|
|
|
$
|
—
|
|
|
$
|
456,543
|
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2016 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
$
|
120,927
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120,927
|
|
Cash and securities held for customers:
|
|
|
|
|
|
|
|
||||||||
US treasury bills: U.S. government and agency securities
|
135,974
|
|
|
—
|
|
|
—
|
|
|
135,974
|
|
||||
Receivable from brokers:
|
|
|
|
|
|
|
|
||||||||
Broker derivative contracts
|
—
|
|
|
5,228
|
|
|
—
|
|
|
5,228
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||
Other
|
115
|
|
|
—
|
|
|
—
|
|
|
115
|
|
||||
Payables to customers:
|
|
|
|
|
|
|
|
||||||||
Customer derivative contracts
|
—
|
|
|
115,677
|
|
|
—
|
|
|
115,677
|
|
||||
Total
|
$
|
257,191
|
|
|
$
|
120,905
|
|
|
$
|
—
|
|
|
$
|
378,096
|
|
(amounts in thousands)
|
As of December 31, 2017
|
|
Fair Value Measurements using:
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables from brokers
|
$
|
73,537
|
|
|
$
|
73,537
|
|
|
$
|
—
|
|
|
$
|
73,537
|
|
|
$
|
—
|
|
Payables to brokers
|
$
|
381
|
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
381
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
$
|
1,108,794
|
|
|
$
|
1,108,794
|
|
|
$
|
—
|
|
|
$
|
1,108,794
|
|
|
$
|
—
|
|
Convertible senior notes
|
$
|
132,221
|
|
|
$
|
205,073
|
|
|
$
|
—
|
|
|
$
|
205,073
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31, 2016
|
|
Fair Value Measurements using:
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables from brokers
|
$
|
55,868
|
|
|
$
|
55,868
|
|
|
$
|
—
|
|
|
$
|
55,868
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
$
|
1,061,146
|
|
|
$
|
1,061,146
|
|
|
$
|
—
|
|
|
$
|
1,061,146
|
|
|
$
|
—
|
|
Convertible senior notes
|
$
|
124,769
|
|
|
$
|
122,264
|
|
|
$
|
—
|
|
|
$
|
122,264
|
|
|
$
|
—
|
|
|
December 31, 2017
|
||||||||||
|
Gross amounts of
assets for
derivative open
positions at fair
value
|
|
Gross amount of
(liabilities) for
derivative open
positions at fair
value
|
|
Net amounts of
assets/(liabilities)
for derivative
open positions at
fair value
|
||||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Foreign currency exchange contracts
|
$
|
121,104
|
|
|
$
|
(31,556
|
)
|
|
$
|
89,548
|
|
CFD contracts
|
102,659
|
|
|
(62,322
|
)
|
|
40,337
|
|
|||
Metals contracts
|
4,084
|
|
|
(2,207
|
)
|
|
1,877
|
|
|||
Total
|
$
|
227,847
|
|
|
$
|
(96,085
|
)
|
|
$
|
131,762
|
|
|
|
|
|
|
|
||||||
|
December 31, 2017
|
||||||||||
|
Cash Collateral
|
|
Net amounts of
assets/(liabilities)
for derivative
open positions at
fair value
|
|
Net amounts of
assets/(liabilities)
presented in the
balance sheet
|
||||||
Derivative Assets/(Liabilities:)
|
|
|
|
|
|
||||||
Receivables from brokers
|
$
|
73,537
|
|
|
$
|
4,966
|
|
|
$
|
78,503
|
|
Payables to customers
|
$
|
(1,108,794
|
)
|
|
$
|
129,966
|
|
|
$
|
(978,828
|
)
|
Payables to brokers
|
$
|
381
|
|
|
$
|
(3,170
|
)
|
|
$
|
(2,789
|
)
|
|
December 31, 2016
|
||||||||||
|
Gross amounts of
assets for derivative open positions at fair value |
|
Gross amount of
(liabilities) for derivative open positions at fair value |
|
Net amounts of
assets/(liabilities) for derivative open positions at fair value |
||||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Foreign currency exchange contracts
|
$
|
130,301
|
|
|
$
|
(59,631
|
)
|
|
$
|
70,670
|
|
CFD contracts
|
74,443
|
|
|
(37,241
|
)
|
|
37,202
|
|
|||
Metals contracts
|
18,766
|
|
|
(5,733
|
)
|
|
13,033
|
|
|||
Total
|
$
|
223,510
|
|
|
$
|
(102,605
|
)
|
|
$
|
120,905
|
|
|
|
|
|
|
|
||||||
|
December 31, 2016
|
||||||||||
|
Cash Collateral
|
|
Net amounts of
assets/(liabilities) for derivative open positions at fair value |
|
Net amounts of
assets/(liabilities) presented in the balance sheet |
||||||
Derivative Assets/(Liabilities):
|
|
|
|
|
|
||||||
Receivables from brokers
|
$
|
55,868
|
|
|
$
|
5,228
|
|
|
$
|
61,096
|
|
Payables to customers
|
$
|
(1,061,145
|
)
|
|
$
|
115,677
|
|
|
$
|
(945,468
|
)
|
|
December 31, 2017
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
2,075,789
|
|
|
4,148,056
|
|
CFD contracts
|
126,519
|
|
|
174,835
|
|
Metals contracts
|
414
|
|
|
217
|
|
Total
|
2,202,722
|
|
|
4,323,108
|
|
|
December 31, 2016
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
2,427,066
|
|
|
2,288,386
|
|
CFD contracts
|
112,685
|
|
|
156,308
|
|
Metals contracts
|
820
|
|
|
341
|
|
Total
|
2,540,571
|
|
|
2,445,035
|
|
|
For the Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Derivative Instruments:
|
|
|
|
||||
Foreign currency exchange contracts
|
$
|
114,149
|
|
|
$
|
163,096
|
|
CFD contracts
|
101,663
|
|
|
128,737
|
|
||
Metals contracts
|
15,151
|
|
|
38,089
|
|
||
Total
|
$
|
230,963
|
|
|
$
|
329,922
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Required collateral
|
$
|
73,537
|
|
|
$
|
55,868
|
|
Open foreign exchange positions
|
4,966
|
|
|
5,228
|
|
||
Total
|
$
|
78,503
|
|
|
$
|
61,096
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Software
|
$
|
57,047
|
|
|
$
|
52,891
|
|
Computer equipment
|
18,390
|
|
|
19,797
|
|
||
Leasehold improvements
|
11,068
|
|
|
11,055
|
|
||
Telephone equipment
|
643
|
|
|
778
|
|
||
Office equipment
|
2,110
|
|
|
2,138
|
|
||
Furniture and fixtures
|
3,592
|
|
|
2,285
|
|
||
Web site development costs
|
386
|
|
|
644
|
|
||
Gross property and equipment
|
93,236
|
|
|
89,588
|
|
||
Less: Accumulated depreciation and amortization
|
(52,494
|
)
|
|
(53,126
|
)
|
||
Property and equipment, net
|
$
|
40,742
|
|
|
$
|
36,462
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
Intangibles
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
Customer list
|
$
|
60,420
|
|
|
$
|
(31,698
|
)
|
|
$
|
28,722
|
|
|
$
|
50,253
|
|
|
$
|
(20,928
|
)
|
|
$
|
29,325
|
|
Technology
|
72,204
|
|
|
(43,270
|
)
|
|
28,934
|
|
|
70,145
|
|
|
(37,074
|
)
|
|
33,071
|
|
||||||
Trademark
|
7,680
|
|
|
(3,730
|
)
|
|
3,950
|
|
|
7,104
|
|
|
(2,505
|
)
|
|
4,599
|
|
||||||
Total finite lived intangibles
|
$
|
140,304
|
|
|
$
|
(78,698
|
)
|
|
$
|
61,606
|
|
|
$
|
127,502
|
|
|
$
|
(60,507
|
)
|
|
$
|
66,995
|
|
Trademarks not subject to amortization
(1)
|
363
|
|
|
—
|
|
|
363
|
|
|
363
|
|
|
—
|
|
|
363
|
|
||||||
Total intangibles assets
|
$
|
140,667
|
|
|
$
|
(78,698
|
)
|
|
$
|
61,969
|
|
|
$
|
127,865
|
|
|
$
|
(60,507
|
)
|
|
$
|
67,358
|
|
Intangible Asset
|
Amount (in thousands)
|
|
Weighted average amortization period
|
||
Customer list
|
$
|
60,420
|
|
|
6.9
|
Technology
|
72,204
|
|
|
9.0
|
|
Trademark
(1)
|
8,043
|
|
|
6.7
|
|
Total intangible assets
|
$
|
140,667
|
|
|
|
•
|
$500
per account for each transferred account that first executes a new trade with GAIN during the
76
-day period immediately following the closing of the account transfer (the “Initial Period”); and
|
•
|
$250
per account for each transferred account that (i) did not execute a new trade with GAIN during the Initial Period and (ii) executes a new trade with GAIN during the
77
-day period immediately following the last day of the Initial Period.
|
|
Retail
|
|
Institutional
|
|
Futures
|
|
Total
|
||||||||
Carrying amount of goodwill as of December 31, 2016
|
$
|
25,222
|
|
|
$
|
4,519
|
|
|
$
|
2,366
|
|
|
$
|
32,107
|
|
Foreign currency translation adjustments
|
730
|
|
|
131
|
|
|
68
|
|
|
929
|
|
||||
Carrying amount of goodwill as of December 31, 2017
|
$
|
25,952
|
|
|
$
|
4,650
|
|
|
$
|
2,434
|
|
|
$
|
33,036
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Vendor and security deposits
|
$
|
11,923
|
|
|
$
|
9,670
|
|
Income tax receivable
|
2,132
|
|
|
1,017
|
|
||
Deferred tax assets, net
|
10,698
|
|
|
15,071
|
|
||
GTX trade receivables
|
5,758
|
|
|
7,515
|
|
||
Customer debit positions
|
2,384
|
|
|
9,781
|
|
||
Allowance on customer debit positions
|
(1,959
|
)
|
|
(9,237
|
)
|
||
Insurance receivable
|
—
|
|
|
3,500
|
|
||
Prepaid assets
|
9,523
|
|
|
8,300
|
|
||
Miscellaneous receivables
|
4,872
|
|
|
6,615
|
|
||
Equity method investment
|
—
|
|
|
601
|
|
||
Deferred commitment fees
|
550
|
|
|
—
|
|
||
Total other assets
|
$
|
45,881
|
|
|
$
|
52,833
|
|
Balance as of January 1, 2015
|
$
|
(4,555
|
)
|
Addition to provision
|
(7,462
|
)
|
|
Amounts collected/written off
|
5,185
|
|
|
Balance as of December 31, 2015
|
(6,832
|
)
|
|
Addition to provision
|
(4,154
|
)
|
|
Amounts collected/written off
|
1,749
|
|
|
Balance as of December 31, 2016
|
(9,237
|
)
|
|
Addition to provision
|
247
|
|
|
Amounts collected/written off
|
7,031
|
|
|
Balance as of December 31, 2017
|
$
|
(1,959
|
)
|
Cash
|
$
|
6,103
|
|
Convertible senior notes
|
65,000
|
|
|
Common stock issued
|
45,100
|
|
|
Total purchase price
|
$
|
116,203
|
|
Cash
|
$
|
10,546
|
|
Cash and securities held for customers
|
281,576
|
|
|
Receivable from brokers
|
35,974
|
|
|
Property and equipment
|
10,466
|
|
|
Prepaid assets
|
4,038
|
|
|
Other assets
|
5,119
|
|
|
Total tangible assets
|
347,719
|
|
|
Total liabilities assumed
|
299,000
|
|
|
Net assets acquired
|
48,719
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
34,277
|
|
|
Trade name
|
6,645
|
|
|
Technology
|
26,157
|
|
|
Intangible assets, net
|
67,079
|
|
|
Goodwill
|
$
|
405
|
|
|
Redeemable non-controlling interests
|
||
December 31, 2015
|
$
|
11,046
|
|
Purchase of additional shares of non-controlling interests
|
(7,444
|
)
|
|
Adjustment to fair value of non-controlling interests
|
(258
|
)
|
|
Adjustment to the redemption value of non-controlling interests
|
2,715
|
|
|
Net income attributable to non-controlling interests
|
2,140
|
|
|
Distributions to non-controlling interest holders
|
(1,605
|
)
|
|
December 31, 2016
|
$
|
6,594
|
|
Adjustment to the redemption value of non-controlling interests
|
(1,656
|
)
|
|
Net income attributable to non-controlling interests
|
620
|
|
|
Distributions to non-controlling interest holders
|
(1,147
|
)
|
|
December 31, 2017
|
$
|
4,411
|
|
•
|
During any calendar quarter commencing after the calendar quarter ending on
March 31, 2014
(and only during such quarter), the last reported sale price of the Company’s common stock for each of at least
20
of the preceding
30
trading days, ending on and including the last trading day of the quarter exceeds
130%
of the conversion price. These days need not be consecutive;
|
•
|
During the
five
consecutive business day period immediately after any
five
consecutive trading day period (such
5
consecutive trading day period being referred to as the “measurement period”), in which the trading price (as defined in the offering memorandum) per
$1,000
principal amount of the notes, as determined following a request by a holder of the notes in the manner described in the offering memorandum, for each trading day of the measurement period, was less than
98%
of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day;
|
•
|
Upon the occurrence of specified corporate events (as described in the offering memorandum); or
|
•
|
If the Company has called the notes for redemption (as described in the offering memorandum).
|
|
December 31,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Liability component - principal
|
$
|
158,350
|
|
|
$
|
138,150
|
|
Deferred bond discount
|
(25,624
|
)
|
|
(13,213
|
)
|
||
Deferred financing cost
|
(505
|
)
|
|
(168
|
)
|
||
Liability component - net carrying value
|
$
|
132,221
|
|
|
$
|
124,769
|
|
|
|
|
|
||||
Additional paid in capital
|
$
|
39,405
|
|
|
$
|
27,822
|
|
Discount attributable to equity
|
(826
|
)
|
|
(419
|
)
|
||
Equity component
|
$
|
38,579
|
|
|
$
|
27,403
|
|
|
For the Fiscal Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Interest expense - stated coupon rate
|
$
|
6,535
|
|
|
$
|
5,725
|
|
Interest expense - amortization of deferred bond discount and costs
|
5,286
|
|
|
4,696
|
|
||
Total interest expense - convertible note
|
$
|
11,821
|
|
|
$
|
10,421
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Employee compensation and benefits
|
$
|
5,093
|
|
|
$
|
4,151
|
|
|
$
|
3,680
|
|
|
|
Options Outstanding
|
|
|
||||||||||
|
|
|
|
|
|
Weighted
|
|
|
||||||
|
|
|
|
Weighted
|
|
Average
|
|
|
||||||
|
|
Number of
|
|
Average
|
|
Remaining
|
|
Aggregate
|
||||||
|
|
Options
|
|
Exercise Price
|
|
Life (Years)
|
|
Intrinsic Value
|
||||||
Outstanding January 1, 2017
|
|
1,393
|
|
|
$
|
6.13
|
|
|
2.96
|
|
|
|||
Granted
|
|
—
|
|
|
—
|
|
|
0.00
|
|
|
||||
Exercised
|
|
(88
|
)
|
|
4.03
|
|
|
3.07
|
|
|
||||
Forfeited/Expired
|
|
(10
|
)
|
|
9.80
|
|
|
4.39
|
|
|
||||
Outstanding December 31, 2017
|
|
1,295
|
|
|
$
|
6.25
|
|
|
2.65
|
|
$
|
4,857
|
|
|
Vested and expected to vest options
|
|
1,286
|
|
|
$
|
6.24
|
|
|
2.63
|
|
$
|
4,824
|
|
|
Exercisable, December 31, 2017
|
|
1,033
|
|
|
$
|
5.90
|
|
|
2.07
|
|
$
|
4,235
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fair market value of common stock at exercise date
|
|
$
|
621
|
|
|
|
|
|
|
|
||||
Cost to exercise
|
|
356
|
|
|
|
|
|
|
|
|||||
Net value of stock options exercised
|
|
$
|
265
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Valuation Assumptions
|
|
|
|
|
|
Risk-free rate
|
NA
|
|
1.19%
|
|
1.47%
|
Expected volatility
|
NA
|
|
47.63%
|
|
49.08%
|
Expected term (years)
|
NA
|
|
4.75
|
|
4.75
|
Dividend yield
|
NA
|
|
3.0%
|
|
2.1%
|
|
|
|
Weighted Average
|
|||
|
Number
|
|
Grant Date
|
|||
Non-Vested Shares
|
of RSUs
|
|
Fair Value
|
|||
Non-vested at January 1, 2017
|
1,474
|
|
|
$
|
7.49
|
|
Granted
|
963
|
|
|
8.20
|
|
|
Vested
|
(572
|
)
|
|
7.25
|
|
|
Forfeited
|
(140
|
)
|
|
7.86
|
|
|
Non-vested at December 31, 2017
|
1,725
|
|
|
$
|
7.93
|
|
|
For the years ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss)/income applicable to GAIN Capital Holdings, Inc.
|
$
|
(11,195
|
)
|
|
$
|
35,272
|
|
|
$
|
10,279
|
|
Adjustment
(1)
|
1,656
|
|
|
(2,715
|
)
|
|
308
|
|
|||
Net (loss)/income available to GAIN common shareholders
|
$
|
(9,539
|
)
|
|
$
|
32,557
|
|
|
$
|
10,587
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
46,740,097
|
|
|
48,588,917
|
|
|
47,601,979
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
245,259
|
|
|
163,223
|
|
|
424,087
|
|
|||
RSUs/RSAs
|
35,746
|
|
|
33,534
|
|
|
352,985
|
|
|||
Diluted weighted average common shares outstanding
|
46,740,097
|
|
|
48,785,674
|
|
|
48,379,051
|
|
|||
(Loss)/earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.67
|
|
|
$
|
0.22
|
|
(1)
|
During the years ending
December 31, 2017
,
2016
and
2015
, the Company concluded that the carrying value of the Company’s redeemable non-controlling interests was less than their redemption value, requiring that an adjustment to the carrying value be recorded for purposes of calculating earnings per common share. The adjustment to increase or reduce the carrying value will, respectively, reduce or increase earnings per common share by reducing or increasing net income available to common shareholders.
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
U.S.
|
$
|
(20,685
|
)
|
|
$
|
2,701
|
|
|
$
|
(39,761
|
)
|
Non-U.S.
|
3,598
|
|
|
44,541
|
|
|
48,188
|
|
|||
Total (loss)/income before tax (benefit)/expense
|
$
|
(17,087
|
)
|
|
$
|
47,242
|
|
|
$
|
8,427
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(5,765
|
)
|
|
$
|
3,365
|
|
|
$
|
1,136
|
|
State
|
48
|
|
|
336
|
|
|
172
|
|
|||
U.K.
|
771
|
|
|
8,859
|
|
|
7,239
|
|
|||
Japan
|
188
|
|
|
64
|
|
|
127
|
|
|||
Australia
|
571
|
|
|
—
|
|
|
—
|
|
|||
Other non-U.S.
|
(39
|
)
|
|
625
|
|
|
169
|
|
|||
Total current income tax (benefit)/expense
|
(4,226
|
)
|
|
13,249
|
|
|
8,843
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(938
|
)
|
|
(276
|
)
|
|
(9,889
|
)
|
|||
State
|
(953
|
)
|
|
(822
|
)
|
|
(1,375
|
)
|
|||
U.K.
|
(1,558
|
)
|
|
601
|
|
|
(337
|
)
|
|||
Singapore
|
412
|
|
|
(2,162
|
)
|
|
—
|
|
|||
Japan
|
175
|
|
|
(528
|
)
|
|
(148
|
)
|
|||
Other non-U.S.
|
233
|
|
|
(620
|
)
|
|
(545
|
)
|
|||
Change in valuation allowance
|
—
|
|
|
326
|
|
|
(61
|
)
|
|||
Total deferred tax benefit
|
(2,629
|
)
|
|
(3,481
|
)
|
|
(12,355
|
)
|
|||
Total income tax (benefit)/expense
|
$
|
(6,855
|
)
|
|
$
|
9,768
|
|
|
$
|
(3,512
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
|
|
||||
Foreign net operating losses
|
$
|
10,474
|
|
|
$
|
10,161
|
|
Share-based compensation
|
1,105
|
|
|
1,506
|
|
||
Intangible assets
|
1,554
|
|
|
5,423
|
|
||
Basis difference in property and equipment
|
3,938
|
|
|
5,138
|
|
||
Other
|
943
|
|
|
2,793
|
|
||
Total deferred tax assets
|
18,014
|
|
|
25,021
|
|
||
Valuation allowance
|
(1,156
|
)
|
|
(1,179
|
)
|
||
Total deferred tax assets after valuation allowance
|
16,858
|
|
|
23,842
|
|
||
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
||||
Unrealized trading losses
|
(559
|
)
|
|
(4,234
|
)
|
||
Discount on convertible note
|
(5,601
|
)
|
|
(4,727
|
)
|
||
Other
|
—
|
|
|
(181
|
)
|
||
Total deferred liabilities
|
(6,160
|
)
|
|
(9,142
|
)
|
||
Net deferred tax assets
|
$
|
10,698
|
|
|
$
|
14,700
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Federal income tax at statutory rate
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
Increase/(decrease) in effective tax rate resulting from:
|
|
|
|
|
|
|||
State income tax
|
3.44
|
%
|
|
(0.67
|
)%
|
|
(9.25
|
)%
|
Foreign rate differential
|
(52.55
|
)%
|
|
8.20
|
%
|
|
(96.96
|
)%
|
Deemed dividends
|
—
|
%
|
|
0.01
|
%
|
|
55.30
|
%
|
Non-deductible transaction costs
|
—
|
%
|
|
—
|
%
|
|
11.71
|
%
|
Impact of non-controlling interests
|
1.27
|
%
|
|
(1.59
|
)%
|
|
(6.89
|
)%
|
Contingent liability
|
—
|
%
|
|
—
|
%
|
|
(27.92
|
)%
|
Foreign losses
|
—
|
%
|
|
—
|
%
|
|
(19.20
|
)%
|
162 (m)
|
(0.85
|
)%
|
|
0.33
|
%
|
|
3.44
|
%
|
GFT carryback
|
—
|
%
|
|
—
|
%
|
|
(6.58
|
)%
|
Uncertain tax positions
|
26.94
|
%
|
|
2.36
|
%
|
|
19.67
|
%
|
Impairment of investment
|
—
|
%
|
|
8.36
|
%
|
|
—
|
%
|
Non-taxable dividend
|
62.44
|
%
|
|
(32.16
|
)%
|
|
—
|
%
|
U.K. bank tax
|
—
|
%
|
|
2.92
|
%
|
|
—
|
%
|
Rate changes
|
(13.14
|
)%
|
|
(1.34
|
)%
|
|
—
|
%
|
Toll tax inclusion
|
(25.96
|
)%
|
|
—
|
%
|
|
—
|
%
|
Foreign tax credit
|
10.28
|
%
|
|
—
|
%
|
|
—
|
%
|
True-ups and deferred tax adjustments
|
(2.73
|
)%
|
|
(2.78
|
)%
|
|
—
|
%
|
Other permanent differences
|
(4.03
|
)%
|
|
2.04
|
%
|
|
—
|
%
|
Effective Tax Rate
|
40.11
|
%
|
|
20.68
|
%
|
|
(41.68
|
)%
|
•
|
The Company paid inter-company dividends due to internal restructuring of
$41.5 million
, which are non-taxable in the jurisdictions received.
|
•
|
The Company released
$4.6 million
of income tax contingencies.
|
•
|
As a result of the enactment of the “Tax Cuts and Jobs Act” in the U.S. on
December 22, 2017
(the "Tax Reform"), the Company: (1) included a provisional
$12.6 million
of additional income, related to the mandatory deemed repatriation of untaxed foreign earnings, offset by current year losses and a foreign tax credit of
$1.7 million
; and (2) incurred
$2.2 million
of tax expense with respect to a DTA revaluation as a result of the change in corporate tax rate from
35%
to
21%
.
|
•
|
The current U.S. tax liability has been estimated using provisional amounts of untaxed foreign earnings. Additionally, the impact of foreign tax credits and the impact on state taxes is provisional. These provisional amounts will be finalized within the measurement period.
|
|
As of December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance as of January 1
|
$
|
4,628
|
|
|
$
|
11,801
|
|
|
$
|
10,517
|
|
Increases based on tax positions related to the current period
|
—
|
|
|
—
|
|
|
885
|
|
|||
Increases/(decreases) based on tax positions related to prior periods
|
(4,331
|
)
|
|
(6,617
|
)
|
|
429
|
|
|||
Decreases related to settlements
|
(297
|
)
|
|
(554
|
)
|
|
—
|
|
|||
Decreases related to a lapse of applicable statute of limitations
|
—
|
|
|
(2
|
)
|
|
(30
|
)
|
|||
Ending balance as of December 31
|
$
|
—
|
|
|
$
|
4,628
|
|
|
$
|
11,801
|
|
Entity Name
|
Minimum
Regulatory Capital Requirements |
|
Capital
Levels Maintained |
|
Excess
Net Capital |
|
Percent of
Requirement Maintained |
|||||||
GAIN Capital Group, LLC
|
$
|
34.7
|
|
|
$
|
48.0
|
|
|
$
|
13.3
|
|
|
138
|
%
|
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|
400
|
%
|
|||
GAIN Capital U.K., Ltd.
|
69.7
|
|
|
208.1
|
|
|
138.4
|
|
|
299
|
%
|
|||
GAIN Capital Japan Co., Ltd.
|
1.5
|
|
|
9.0
|
|
|
7.5
|
|
|
600
|
%
|
|||
GAIN Capital Australia, Pty. Ltd.
|
0.8
|
|
|
4.7
|
|
|
3.9
|
|
|
588
|
%
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
4.7
|
|
|
2.8
|
|
|
247
|
%
|
|||
GAIN Global Markets, Inc.
|
1.6
|
|
|
2.4
|
|
|
0.8
|
|
|
150
|
%
|
|||
GAIN Capital-Forex.com Canada, Ltd.
|
0.2
|
|
|
1.7
|
|
|
1.5
|
|
|
850
|
%
|
|||
GAIN Capital Singapore Pte., Ltd.
|
0.6
|
|
|
6.0
|
|
|
5.4
|
|
|
1,000
|
%
|
|||
Trade Facts, Ltd.
|
0.6
|
|
|
3.2
|
|
|
2.6
|
|
|
533
|
%
|
|||
Global Asset Advisors, LLC
|
—
|
|
|
1.8
|
|
|
1.8
|
|
|
180
|
%
|
|||
GAIN Capital Payments Ltd.
|
0.2
|
|
|
0.4
|
|
|
0.2
|
|
|
200
|
%
|
|||
GTX SEF, LLC
|
1.0
|
|
|
1.4
|
|
|
0.4
|
|
|
140
|
%
|
|||
Total
|
$
|
112.9
|
|
|
$
|
291.8
|
|
|
$
|
178.9
|
|
|
258
|
%
|
|
Retail
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenue
|
$
|
237,418
|
|
|
$
|
336,353
|
|
|
$
|
351,472
|
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
60,887
|
|
|
62,423
|
|
|
67,515
|
|
|||
Selling and marketing
|
29,929
|
|
|
27,666
|
|
|
26,129
|
|
|||
Referral fees
|
39,711
|
|
|
55,080
|
|
|
87,175
|
|
|||
Other operating expenses
|
61,735
|
|
|
75,488
|
|
|
76,301
|
|
|||
Segment profit
|
$
|
45,156
|
|
|
$
|
115,696
|
|
|
$
|
94,352
|
|
|
|
|
|
|
|
||||||
|
Institutional
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenue
|
$
|
31,155
|
|
|
$
|
30,219
|
|
|
$
|
35,072
|
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
13,887
|
|
|
14,424
|
|
|
15,305
|
|
|||
Selling and marketing
|
86
|
|
|
103
|
|
|
138
|
|
|||
Other operating expenses
|
12,274
|
|
|
10,342
|
|
|
9,573
|
|
|||
Segment profit
|
$
|
4,908
|
|
|
$
|
5,350
|
|
|
$
|
10,056
|
|
|
|
|
|
|
|
||||||
|
Futures
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenue
|
$
|
40,291
|
|
|
48,084
|
|
|
45,797
|
|
||
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
9,387
|
|
|
11,967
|
|
|
10,634
|
|
|||
Selling and marketing
|
786
|
|
|
972
|
|
|
901
|
|
|||
Referral fees
|
13,960
|
|
|
15,672
|
|
|
16,348
|
|
|||
Other operating expenses
|
12,931
|
|
|
14,769
|
|
|
13,960
|
|
|||
Segment profit
|
$
|
3,227
|
|
|
$
|
4,704
|
|
|
$
|
3,954
|
|
|
|
|
|
|
|
||||||
|
Corporate and Other
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Other revenue
|
$
|
(240
|
)
|
|
$
|
(2,831
|
)
|
|
$
|
(3,716
|
)
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
11,057
|
|
|
13,090
|
|
|
13,127
|
|
|||
Selling and marketing
|
399
|
|
|
1
|
|
|
—
|
|
|||
Other operating expenses
|
6,453
|
|
|
10,210
|
|
|
11,038
|
|
|||
Loss
|
$
|
(18,149
|
)
|
|
$
|
(26,132
|
)
|
|
$
|
(27,881
|
)
|
|
For the Fiscal Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Retail segment
|
$
|
45,156
|
|
|
$
|
115,696
|
|
|
$
|
94,352
|
|
Institutional segment
|
4,908
|
|
|
5,350
|
|
|
10,056
|
|
|||
Futures segment
|
3,227
|
|
|
4,704
|
|
|
3,954
|
|
|||
Corporate and other
|
(18,149
|
)
|
|
(26,132
|
)
|
|
(27,881
|
)
|
|||
SEGMENT PROFIT
|
35,142
|
|
|
99,618
|
|
|
80,481
|
|
|||
Depreciation and amortization
|
17,907
|
|
|
13,905
|
|
|
11,111
|
|
|||
Purchased intangible amortization
|
16,110
|
|
|
15,016
|
|
|
16,550
|
|
|||
Acquisition expenses
|
—
|
|
|
—
|
|
|
2,819
|
|
|||
Restructuring expenses
|
—
|
|
|
1,041
|
|
|
3,482
|
|
|||
Integration expenses
|
—
|
|
|
2,788
|
|
|
33,092
|
|
|||
Impairment of investment
|
620
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value to contingent consideration
|
—
|
|
|
—
|
|
|
(6,722
|
)
|
|||
Legal settlement
|
—
|
|
|
9,205
|
|
|
—
|
|
|||
SNB bad debt provision
|
—
|
|
|
—
|
|
|
2,500
|
|
|||
Other corporate expenses
|
827
|
|
|
—
|
|
|
—
|
|
|||
OPERATING (LOSS)/PROFIT
|
(322
|
)
|
|
57,663
|
|
|
17,649
|
|
|||
Interest expense on long term borrowings
|
11,821
|
|
|
10,421
|
|
|
9,222
|
|
|||
Loss on extinguishment of debt
|
4,944
|
|
|
—
|
|
|
—
|
|
|||
(LOSS)/INCOME BEFORE INCOME TAX (BENEFIT)/EXPENSE
|
$
|
(17,087
|
)
|
|
$
|
47,242
|
|
|
$
|
8,427
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net Revenue
(1)
:
|
|
|
|
|
|
||||||
North America
(2)
|
$
|
126,811
|
|
|
$
|
126,600
|
|
|
$
|
107,534
|
|
Europe
(3)
|
154,027
|
|
|
264,879
|
|
|
307,087
|
|
|||
Other
|
27,786
|
|
|
20,346
|
|
|
20,726
|
|
|||
Total Net Revenue
|
$
|
308,624
|
|
|
$
|
411,825
|
|
|
$
|
435,347
|
|
|
2017
|
|
2016
|
||||
Long-lived assets
(1)
:
|
|
|
|
||||
North America
(2)
|
$
|
8,848
|
|
|
$
|
6,875
|
|
Europe
(3)
|
29,961
|
|
|
27,779
|
|
||
Other
|
1,933
|
|
|
1,808
|
|
||
Total long-lived assets
|
$
|
40,742
|
|
|
$
|
36,462
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
58,889
|
|
|
$
|
96,901
|
|
|
$
|
79,923
|
|
|
$
|
67,965
|
|
Net revenue
|
$
|
59,567
|
|
|
$
|
98,054
|
|
|
$
|
81,313
|
|
|
$
|
69,690
|
|
Income/(loss) before income tax expense
|
$
|
(23,659
|
)
|
|
$
|
15,120
|
|
|
$
|
(1,896
|
)
|
|
$
|
(6,652
|
)
|
Net income/(loss)
|
$
|
(18,786
|
)
|
|
$
|
14,092
|
|
|
$
|
(2,355
|
)
|
|
$
|
(3,526
|
)
|
Net income attributable to non-controlling interest
|
$
|
85
|
|
|
$
|
153
|
|
|
$
|
225
|
|
|
$
|
157
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
(18,871
|
)
|
|
$
|
13,939
|
|
|
$
|
(2,580
|
)
|
|
$
|
(3,683
|
)
|
Basic net income/(loss) per share
|
$
|
(0.39
|
)
|
|
$
|
0.31
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.08
|
)
|
Diluted net income/(loss) per share
|
$
|
(0.39
|
)
|
|
$
|
0.31
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
115,340
|
|
|
$
|
107,975
|
|
|
$
|
71,966
|
|
|
$
|
115,427
|
|
Net revenue
|
$
|
115,554
|
|
|
$
|
108,290
|
|
|
$
|
72,223
|
|
|
$
|
115,758
|
|
Income/(loss) before income tax expense
|
$
|
11,064
|
|
|
$
|
16,629
|
|
|
$
|
(7,156
|
)
|
|
$
|
26,705
|
|
Net income/(loss)
|
$
|
8,701
|
|
|
$
|
11,586
|
|
|
$
|
(3,966
|
)
|
|
$
|
21,091
|
|
Net income attributable to non-controlling interest
|
$
|
349
|
|
|
$
|
745
|
|
|
$
|
748
|
|
|
$
|
298
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
8,352
|
|
|
$
|
10,841
|
|
|
$
|
(4,714
|
)
|
|
$
|
20,793
|
|
Basic net income/(loss) per share
|
$
|
0.17
|
|
|
$
|
0.19
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
Diluted net income/(loss) per share
|
$
|
0.17
|
|
|
$
|
0.19
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.42
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
138
|
|
|
$
|
3,350
|
|
Equity investments in subsidiaries
|
523,353
|
|
|
501,553
|
|
||
Income tax receivable
|
1,864
|
|
|
903
|
|
||
Deferred tax assets, net
|
4,969
|
|
|
10,120
|
|
||
Other assets
|
3,153
|
|
|
6,100
|
|
||
Total assets
|
$
|
533,477
|
|
|
$
|
522,026
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accrued compensation and benefits
|
$
|
—
|
|
|
$
|
60
|
|
Accrued expenses and other liabilities
|
7,170
|
|
|
13,489
|
|
||
Payable to affiliates
|
108,338
|
|
|
89,526
|
|
||
Convertible senior notes
|
132,221
|
|
|
124,769
|
|
||
Total liabilities
|
247,729
|
|
|
227,844
|
|
||
Commitments and contingent liabilities (refer to Note 3)
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
||||
Common stock ($0.00001 par value; 120 million shares authorized, 53,612,340 shares issued and 45,152,299 shares outstanding as of December 31, 2017; 120 million shares authorized, 52,848,811 shares issued and 48,220,243 shares outstanding as of December 31, 2016)
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
235,659
|
|
|
218,392
|
|
||
Retained earnings
|
122,686
|
|
|
143,399
|
|
||
Accumulated other comprehensive loss
|
(15,670
|
)
|
|
(36,842
|
)
|
||
Treasury stock, at cost (8,460,041 shares at December 31, 2017 and 4,628,568 at December 31, 2016, respectively)
|
(56,927
|
)
|
|
(30,767
|
)
|
||
Total shareholders’ equity
|
285,748
|
|
|
294,182
|
|
||
Total liabilities and shareholders’ equity
|
$
|
533,477
|
|
|
$
|
522,026
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
Dividends from subsidiaries
|
$
|
6,900
|
|
|
$
|
—
|
|
|
$
|
38,642
|
|
Interest and other
|
30
|
|
|
64
|
|
|
178
|
|
|||
Total revenue
|
$
|
6,930
|
|
|
$
|
64
|
|
|
$
|
38,820
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Interest expense
|
204
|
|
|
39
|
|
|
63
|
|
|||
Employee compensation and benefits
|
728
|
|
|
6,852
|
|
|
10,096
|
|
|||
Legal settlement
|
2
|
|
|
9,205
|
|
|
—
|
|
|||
General and administrative
|
4,905
|
|
|
6,412
|
|
|
6,775
|
|
|||
Total operating expense
|
5,839
|
|
|
22,508
|
|
|
16,934
|
|
|||
Interest expense on long term borrowings
|
11,821
|
|
|
10,421
|
|
|
9,222
|
|
|||
Loss on extinguishment of debt
|
4,944
|
|
|
—
|
|
|
—
|
|
|||
(LOSS)/INCOME BEFORE INCOME TAX EXPENSE
|
(15,674
|
)
|
|
(32,865
|
)
|
|
12,664
|
|
|||
Income tax (benefit)/expense
|
(7,614
|
)
|
|
2,603
|
|
|
(10,875
|
)
|
|||
NET (LOSS)/INCOME BEFORE UNDISTRIBUTED EARNINGS OF SUBSIDIARIES
|
(8,060
|
)
|
|
(35,468
|
)
|
|
23,539
|
|
|||
Equity in (loss)/earnings of subsidiaries
|
(3,135
|
)
|
|
70,741
|
|
|
(13,260
|
)
|
|||
NET (LOSS)/INCOME
|
(11,195
|
)
|
|
35,273
|
|
|
10,279
|
|
|||
Other comprehensive income/(loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
21,172
|
|
|
(30,977
|
)
|
|
(4,352
|
)
|
|||
TOTAL COMPREHENSIVE INCOME
|
$
|
9,977
|
|
|
$
|
4,296
|
|
|
$
|
5,927
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net (loss)/income
|
$
|
(11,195
|
)
|
|
$
|
35,273
|
|
|
$
|
10,279
|
|
Adjustments to reconcile net (loss)/income to cash provided by operating activities
|
|
|
|
|
|
||||||
Equity in loss/(earnings) of subsidiaries
|
3,135
|
|
|
(70,741
|
)
|
|
13,260
|
|
|||
Loss/(gain) on extinguishment of debt
|
4,944
|
|
|
(89
|
)
|
|
—
|
|
|||
(Gain)/loss on foreign currency exchange rates
|
(16
|
)
|
|
21
|
|
|
(66
|
)
|
|||
Deferred tax benefit
|
(1,891
|
)
|
|
(1,098
|
)
|
|
(11,264
|
)
|
|||
Amortization of deferred financing costs
|
495
|
|
|
442
|
|
|
354
|
|
|||
Dividends received
|
—
|
|
|
28
|
|
|
—
|
|
|||
Share-based compensation
|
5,093
|
|
|
4,151
|
|
|
3,680
|
|
|||
Convertible senior notes discount amortization
|
4,917
|
|
|
4,310
|
|
|
3,624
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables from affiliates
|
—
|
|
|
2,442
|
|
|
37,548
|
|
|||
Other assets
|
2,944
|
|
|
(5,861
|
)
|
|
7,237
|
|
|||
Income tax payable
|
(945
|
)
|
|
13,121
|
|
|
(9,069
|
)
|
|||
Accrued compensation and benefits
|
(60
|
)
|
|
(151
|
)
|
|
160
|
|
|||
Accrued expenses and other liabilities
|
(6,972
|
)
|
|
(6,949
|
)
|
|
(4,876
|
)
|
|||
Payable to affiliates
|
18,828
|
|
|
64,064
|
|
|
(36,549
|
)
|
|||
Cash provided by operating activities
|
19,277
|
|
|
38,963
|
|
|
14,318
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Investment in and funding of subsidiaries
|
(2,106
|
)
|
|
(16,513
|
)
|
|
7,081
|
|
|||
Cash (used in)/provided by investing activities
|
(2,106
|
)
|
|
(16,513
|
)
|
|
7,081
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Contractual payments for acquisitions
|
—
|
|
|
—
|
|
|
(11,829
|
)
|
|||
Convertible note issuance, net of commissions
|
89,010
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of convertible notes
|
(73,057
|
)
|
|
(1,735
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
—
|
|
|
706
|
|
|
2,386
|
|
|||
Proceeds from employee stock purchase plan
|
642
|
|
|
610
|
|
|
789
|
|
|||
Purchase of treasury stock
|
(26,160
|
)
|
|
(8,959
|
)
|
|
(5,088
|
)
|
|||
Excess tax benefit from employee stock option exercises
|
356
|
|
|
49
|
|
|
1,140
|
|
|||
Dividend payments
|
(11,174
|
)
|
|
(10,222
|
)
|
|
(9,530
|
)
|
|||
Cash used in financing activities
|
(20,383
|
)
|
|
(19,551
|
)
|
|
(22,132
|
)
|
|||
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
|
(3,212
|
)
|
|
2,899
|
|
|
(733
|
)
|
|||
CASH AND CASH EQUIVALENTS — Beginning of year
|
3,350
|
|
|
451
|
|
|
1,184
|
|
|||
CASH AND CASH EQUIVALENTS — End of year
|
$
|
138
|
|
|
$
|
3,350
|
|
|
$
|
451
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
5,012
|
|
|
$
|
5,830
|
|
|
$
|
4,538
|
|
Tax refunds/(tax payments)
|
$
|
827
|
|
|
$
|
(3,552
|
)
|
|
$
|
733
|
|
Non-cash financing activities related to acquisitions:
|
|
|
|
|
|
||||||
Common stock issued as consideration for asset and business acquisitions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,100
|
|
Exhibit
No.
|
|
Description
|
|
|
|
|
|
|
|
2.1†
|
|
Asset Purchase Agreement dated as of April 20, 2011 by and among GAIN Capital Group, LLC and Deutsche Bank AG, acting through is London Branch (incorporated by reference to Exhibit 2.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2011, filed on May 16, 2011, No. 001-35008).
|
|
|
|
|
|
|
|
2.2
|
|
Stock Purchase Agreement, dated as of April 24, 2013, by and among GAIN Capital Holdings, Inc., Gary J. Tilkin and Global Futures & Forex, Ltd. (incorporated by reference to Exhibit 2.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2013, filed on May 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
2.3
|
|
Amended and Restated Stock Purchase Agreement, dated as of September 24, 2013, by and among GAIN Capital Holdings, Inc., Gary J. Tilkin and Global Futures & Forex, Ltd. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, filed on September 25, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
2.4
|
|
Share Purchase Agreement, dated as of October 31, 2014, by and among GAIN Capital Holdings, Inc., City Index Group Limited, INCAP Gaming B.V. and IPGL Limited (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K/A, filed on January 12, 2015, No. 001-35008).
|
|
|
|
|
|
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.3 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Designation of Series A Participating Cumulative Preferred Stock of GAIN Capital Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on April 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
3.3
|
|
Amended and Restated By-laws (incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.1
|
|
Specimen Certificate evidencing shares of common stock (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.2
|
|
Investor Rights Agreement, dated January 11, 2008, by and among the Company, the Investors and the Founding Stockholders, as defined therein (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.3
|
|
Amendment to Investor Rights Agreement, dated as of November 18, 2013, by and among the Company, the Investors named therein and the Founding Stockholder, as defined therein (incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed on March 17, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
4.4
|
|
Rights Agreement, dated as of April 9, 2013, between GAIN Capital Holdings, Inc. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed on April 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
4.5
|
|
Indenture, dated as of November 27, 2013, between GAIN Capital Holdings, Inc. and The Bank of New York Mellon (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed on November 27, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
4.6
|
|
Indenture, dated as of April 1, 2015, between GAIN Capital Holdings, Inc. and The Bank of New York Mellon (incorporated by reference to Exhibit 4.11 of the Registrant’s Registration Statement on Form S-3, as amended, No. 333-208175).
|
|
|
|
|
|
|
|
4.7
|
|
Indenture, dated as of August 22, 2017, between GAIN Capital Holdings, Inc. and The Bank of New York Mellon (incorporated by reference to exhibit 4.1 of the Registrant’s Current Report on Form 8-K, filed on August 23, 2017, No. 001-35008).
|
|
|
|
|
|
|
|
4.8
|
|
Form of 5.00% Convertible Senior Notes due 2022 (included in Exhibit 4.7).
|
|
|
|
|
|
|
|
10.1
|
|
2015 Omnibus Incentive Compensation Plan (incorporated by reference to Annex A of the Registrant’s Definitive Proxy Statement on Schedule 14A, filed on October 15, 2015, No. 001-35008).**
|
|
|
|
|
|
|
10.2
|
|
2010 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.3
|
|
2011 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.4
|
|
Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 10-K for the year ended December 31, 2010, filed on March 30, 2011, No. 001-35008).**
|
|
|
|
|
|
|
|
10.5
|
|
Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.6
|
|
Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.7
|
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.8
|
|
Form of Restricted Stock Unit Agreement (Time Vesting) (incorporated by reference to Exhibit 10.7 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.9
|
|
Form of Restricted Stock Unit Agreement (Performance Vesting) (incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.10
|
|
Form of Indemnification Agreement with the Company’s Non-Employee Directors (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.11
|
|
Amended and Restated 2006 Equity Compensation Plan, effective December 31, 2006 (incorporated by reference to Exhibit 10.60 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.12
|
|
Amendment No. 2007-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (incorporated by reference to Exhibit 10.61 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.13
|
|
Amendment No. 2008-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (incorporated by reference to Exhibit 10.62 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.14
|
|
Amendment No. 2010-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (incorporated by reference to Exhibit 10.63 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.15†
|
|
FX Prime Brokerage Master Agreement, dated as of December 6, 2006, by and between GAIN Capital Group, LLC and The Royal Bank of Scotland, plc. (incorporated by reference to Exhibit 10.24 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
10.16†
|
|
FX Prime Brokerage Agreement, dated as of July 8, 2005, by and between UBS AG and GAIN Capital, Inc. (incorporated by reference to Exhibit 10.25 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.17†
|
|
Foreign Exchange Prime Brokerage Agency Agreement, dated as of July 12, 2006, by and between GAIN Capital Group, LLC and The Royal Bank of Scotland, plc. (incorporated by reference to Exhibit 10.26 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.18†
|
|
Foreign Exchange Prime Brokerage Agreement, dated October 18, 2005, by and between Deutsche Bank AG, London Branch and GCAM, LLC (incorporated by reference to Exhibit 10.27 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.19
|
|
Amendment to Foreign Exchange Prime Brokerage Agreement, dated January 26, 2006, by and between Deutsche Bank AG, London Branch and GCAM, LLC (incorporated by reference to Exhibit 10.28 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.20
|
|
Form of ISDA Master Agreement, 1992 edition (incorporated by reference to Exhibit 10.29 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.21
|
|
Form of Introducing Broker Agreement (incorporated by reference to Exhibit 10.30 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.22
|
|
Form of Agreement for White Label Services (incorporated by reference to Exhibit 10.31 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.23
|
|
Lease and Lease Agreement, dated August 18, 2009, by and between S/K Bed One Associates LLC and GAIN Capital Holdings, Inc. (incorporated by reference to Exhibit 10.37 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.24†
|
|
License Agreement, dated August 9, 2007, by and between GAIN Capital Group, LLC and MetaQuotes Software Corp. (incorporated by reference to Exhibit 10.43 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.25†
|
|
Agreement, dated November 22, 2004, by and between esignal, a division of Interactive Data Corporation, and GAIN Capital, Inc. (incorporated by reference to Exhibit 10.44 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.26
|
|
Form of ISDA Master Agreement, 2002 edition (incorporated by reference to Exhibit 10.49 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.27
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Glenn Stevens (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.28
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Samantha Roady (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
10.29
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Diego Rotsztain (incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.30
|
|
Service Agreement, dated as of March 9, 2011, by and between City Index Limited and Nigel Rose (incorporated by reference to Exhibit 10.31 of the Registrant's Annual Report on Form 1-K for the year ended December 31, 2015, filed on March 17, 2016, No. 001-35008).**
|
|
|
|
|
|
|
|
10.31
|
|
Asset Purchase Agreement, dated as of October 5, 2010, by and among GAIN Capital Group, LLC, GAIN Capital-Forex.com U.K., and GAIN Capital Forex.com Japan, Co. Ltd., and Capital Market Services, LLC, Capital Market Services UK Ltd., Capital Market Services International - BM, Ltd., and CMS Japan K.K. (incorporated by reference to Exhibit 10.64 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.33
|
|
Amendment No. 1 to Asset Purchase Agreement, dated as of November 23, 2010, by and among GAIN Capital Group, LLC, GAIN Capital-Forex.com U.K., and GAIN Capital Forex.com Japan, Co. Ltd., and Capital Market Services, LLC, Capital Market Services UK Ltd., Capital Market Services International - BM, Ltd., and CMS Japan K.K. (incorporated by reference to Exhibit 10.65 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.33
|
|
Stock Purchase Agreement between optionsXpress Holdings, Inc. and GAIN Capital Group, LLC dated as of June 27, 2012 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed August 9, 2012, No. 001-35008).
|
|
|
|
|
|
|
|
10.34
|
|
Stockholders’ Agreement, dated as of April 24, 2013, by and among GAIN Capital Holdings, Inc. and Gary J. Tilkin (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2013, filed on May 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
10.35
|
|
Amended and Restated Stockholders’ Agreement, dated as of September 24, 2013, by and between GAIN Capital Holdings, Inc. and Gary J. Tilkin (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter ended September 30, 2013, filed on November 12, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
10.36
|
|
Membership Interest Purchase Agreement, dated as of March 7, 2014, by and among GAIN Capital Holdings, Inc., Global Asset Advisors, LLC, Lucky Good Dog, L.L.C., Glenn A. Swanson and Andrew W. Daniels (incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 12, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.37
|
|
Membership Interest Purchase Agreement, dated as of March 7, 2014, by and among GAIN Capital Holdings, Inc., Top Third Ag Marketing LLC, Global Asset Advisors, LLC, Lucky Good Dog, L.L.C., Glenn A. Swanson and Mark Gold (incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 12, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.38
|
|
Asset Purchase Agreement, dated as of July 10, 2014, between GAIN GTX Bermuda, Ltd., GAIN Capital Holdings, Inc. and Valaquenta Intellectual Properties Limited (incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on November 11, 2014, No. 001-35008).
|
|
|
|
|
|
|
10.39
|
|
Asset Purchase Agreement, dated as of July 10, 2014, between GAIN GTX Bermuda, Ltd., GAIN Capital Holdings, Inc. and Forexster Limited (incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on November 11, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.40
|
|
Stockholders' Agreement, effective as of October 31, 2014, among GAIN Capital Holdings, Inc., City Index Group Limited and the other parties identified as "Stockholders" therein (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K/A, filed on January 12, 2015, No. 001-35008).
|
|
|
|
|
|
|
|
10.41
|
|
Form of Registration Rights Agreement among GAIN Capital Holdings, Inc., City Index Group Limited, INCAP Gaming B.V. and the other parties identified as "Investors" therein (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K/A, filed on January 12, 2015, No. 001-35008).
|
|
|
|
|
|
|
|
10.42
|
|
Letter Agreement, dated as of December 10, 2014, by and among GAIN Capital Holdings, Inc., VantagePoint Venture Partners IV (Q), L.P., VantagePoint Venture Partners IV, L.P., VantagePoint Venture Partners IV Principals Fund, L.P. and VP New York Venture Partners, L.P.
|
|
|
|
|
|
|
|
10.43
|
|
Asset Purchase Agreement, dated as of February 7, 2017, by and between GAIN Capital Group, LLC and Forex Capital Markets L.L.C. (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 10, 2017, No. 001-35008)
|
|
|
|
|
|
|
|
10.44
|
|
Credit Facility, dated as of August 2, 2017, by and among GAIN Capital Holdings, Inc., Barclays Bank PLC, Sterling National Bank and the lenders set forth therein (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 8, 2017, No. 001-35008).
|
|
|
|
|
|
|
|
10.45*
|
|
Executive Employment Agreement, dated November 7, 2017, by and between GAIN Capital UK Ltd. and Alastair Hine **
|
|
|
|
|
|
|
|
21.1*
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
23.1*
|
|
Consent of Deloitte & Touche LLP
|
|
|
|
|
|
|
|
23.2*
|
|
Consent of BDO LLP
|
|
|
|
|
|
|
|
23.3*
|
|
Consent of KPMG LLP
|
|
|
|
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
**
|
Compensation related contract.
|
†
|
Confidential treatment requested. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
+
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed, and is not a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Glenn H. Stevens
|
|
Glenn H. Stevens
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Glenn H. Stevens
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 14, 2018
|
Glenn H. Stevens
|
|
|
|
|
|
|
|
|
|
/s/ Nigel Rose
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 14, 2018
|
Nigel Rose
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Schenk
|
|
Chairman of the Board of Directors
|
|
March 14, 2018
|
Joseph A. Schenk
|
|
|
|
|
|
|
|
|
|
/s/ Peter Quick
|
|
Director
|
|
March 14, 2018
|
Peter Quick
|
|
|
|
|
|
|
|
|
|
/s/ Christopher W. Calhoun
|
|
Director
|
|
March 14, 2018
|
Christopher W. Calhoun
|
|
|
|
|
|
|
|
|
|
/s/ Thomas Bevilacqua
|
|
Director
|
|
March 14, 2018
|
Thomas Bevilacqua
|
|
|
|
|
|
|
|
|
|
/s/ Christopher S. Sugden
|
|
Director
|
|
March 14, 2018
|
Christopher S. Sugden
|
|
|
|
|
|
|
|
|
|
/s/ Mark Richards
|
|
Director
|
|
March 14, 2018
|
Mark Richards
|
|
|
|
|
|
|
|
|
|
/s/ Alex Goor
|
|
Director
|
|
March 14, 2018
|
Alex Goor
|
|
|
|
|
2
|
Appointment.
|
(a)
|
The Company will employ and the Executive will serve as Chief Operating Officer on the terms of this Agreement.
|
(b)
|
The Executive will report to the Chief Executive Officer of the Parent Company and shall have general control and responsibility for the management of the general business operations of the Company and the other Group Companies, in each case as defined by the Chief Executive Officer of the Parent Company from time to time.
|
(c)
|
The Executive represents that he is entering into this Agreement voluntarily and that his Employment hereunder and his compliance with the terms and conditions of this Agreement will not conflict with or result in the breach of any agreement to which he is a party or by which he may be bound, or any legal duty that he owes or may owe to another.
|
3
|
Employment Term.
|
(a)
|
The Employment will start on 3 November 2018 and will continue on and subject to the terms of this Agreement, in particular clause 17 below, for an initial period expiring on 31 December 2018, after which the Employment will automatically renew annually for a further period of one year unless either party gives the other at least 60 days’ written notice of non-renewal, in which case this Agreement will terminate on the date specified in such written notice.
|
(b)
|
The first six months of the Executive’s employment shall be a probationary period (the “
Probationary Period
”). The Company may, at its absolute discretion, extend this period for such further period as it may decide. During the Probationary Period your performance and suitability for continued employment will be monitored.
|
(c)
|
The Company may, in its absolute discretion, at any time terminate the Employment with immediate effect by notice in writing to inform the Executive that the Employment will terminate with immediate effect and that the Company will pay the Executive an amount in lieu of all or part of the period of notice set forth in clause 17(d) equal to the portion of his Base Salary otherwise payable during such period, provided that:
|
(i)
|
Any payments due to the Executive under this clause 3 will be subject to such deductions as the Company is required to make;
|
(ii)
|
The Executive will only be entitled to payment under this clause 3 if the Company notifies him in writing of its decision to make the payment in lieu of notice and the Executive complies with his obligations under this Agreement including and in particular under clause 23
(Restrictions after Employment)
; and
|
(iii)
|
The Company may pay any sums due to the Executive under this clause 3 in equal monthly instalments (on or about the normal date of payment of Base Salary) until the date upon which the notice period (or the balance of the notice period) applicable under clause 17 would otherwise have expired.
|
4
|
Duties and Extent of Services.
|
(a)
|
As an executive officer of the Company, the Executive shall be entitled to all of the benefits and protections to which all officers of the Company are entitled pursuant to the Company’s organisational documents, which shall include, but not be limited to, the rights of indemnification set forth in such organisational documents, and coverage under the Company’s directors’ and officers’ liability insurance, as are in effect from time to time.
|
(b)
|
During the Employment, the Executive agrees to devote all his business time, attention, and skill to the Company’s business and that of any Group Companies. The Executive covenants, warrants and represents that he shall devote his full and best efforts to the fulfillment of his employment obligations, and he shall exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties. He will do his best to promote the interests of the Company and Group Companies.
|
(c)
|
During the Employment, the Executive will comply with the following:
|
(i)
|
the provisions of the Criminal Justice Act 1993 or any other legislation relating to insider trading or market abuse; and
|
(ii)
|
the rules of any other relevant recognised investment exchange; and
|
(iii)
|
all rules issued by the Company and any Group Company in relation to owning or trading securities.
|
(d)
|
The Executive acknowledges that he is in the position of a fiduciary having regard to the nature and seniority of his position and owes a duty to disclose to the Company his own misdeeds and those of any other person employed or engaged by the Company or any Group Company.
|
(e)
|
The Executive will notify the Chief Executive Officer of the Parent Company immediately if he becomes aware of any matter which does or which might adversely affect the interests of the Company or any Group Company giving all necessary particulars.
|
5
|
Hours of work
|
(a)
|
There are no normal hours of work for the Executive’s appointment. He will work whatever hours are necessary to carry out his duties properly.
He shall not be entitled to additional remuneration for working outside normal office hours of the Company and any Group Company.
|
(b)
|
The Executive agrees that the limit on working time in Regulation 4(1) of the Regulations will not apply to his Employment (the “
Opt-Out
”). The Executive may (subject to the provisions of the Regulations and without prejudice to the other terms of this Agreement) give three months written notice to the Company that he wishes to withdraw his agreement to the Opt-Out.
|
6
|
Place of work.
The Executive will be based at the Company’s office in London. The Company reserves the right to change the Executive’s place of work to another location in the United Kingdom. The Executive may be required to travel both throughout and outside the United Kingdom.
|
7
|
Compensation
|
(a)
|
Base Salary
. The Company shall pay the Executive an annualized base salary of £250,000 (the “
Base Salary
”) in equal monthly instalments in arrears. Currently payment is made on or around the 21st of each calendar month. Salary will accrue from day to day and will be calculated on the basis of 260 working days per annum. The Base Salary shall be reviewed periodically by the Board’s Compensation Committee (the “
Compensation Committee
”) and, in the sole discretion of the Compensation Committee, the Base Salary may be adjusted effective as of any date determined by the Compensation Committee. The Executive shall not receive any additional compensation from any Group Company. The Base Salary includes any fees to which the Executive may be entitled should be serve as a director of the Company or any Group Company.
|
(b)
|
Bonus
. Subject always to any legal or regulatory obligations applicable to the Company for the time being and any steps which the Company considers to be appropriate to comply with such obligations, during the Employment, the Executive shall be eligible to participate in each bonus or incentive compensation plan, program or policy maintained by the Company from time to time, including those maintained by the Parent Company and adopted by the Company, in whole or in part, for the executive officers of the Company (each, an “Incentive Compensation Plan” and payments thereunder, “Incentive Compensation”). The Executive’s target and maximum compensation under, and his performance goals and other terms of participation in, each Incentive Compensation Plan shall be determined by the Compensation Committee in its sole discretion. Save as otherwise set out in this Agreement, any such Incentive Compensation is not guaranteed and is contingent upon the Executive and the Parent Company achieving established deliverables or other goals. Any such Incentive Compensation shall not be considered “earned” by the Executive until the Company has allocated payment to be made to the Executive for any performance period. Payment under any such Incentive Compensation Plan shall be made, if at all, after the close of the relevant performance period in accordance with the Company’s normal bonus procedures then in effect. Notwithstanding anything herein to the contrary, to the extent permitted or required by governing law, the Compensation Committee shall have discretion to adjust the Executive’s compensation for the following year to account for, or to require the Executive to repay to the Company, the amount of any Incentive Compensation to the extent the Compensation Committee or the Board determines that such Incentive Compensation was not actually earned by the Executive due to (%3) the amount of such payment being based on the achievement of financial results that were subsequently the subject of a material accounting restatement that occurs within three years of such payment (except in the case of a restatement due to a change in accounting policy or simple error); (%3) the Executive having engaged in fraud, gross negligence or intentional misconduct; or (%3) the Executive having deliberately misled the market or the Company’s stockholders regarding the financial performance of the Company or any Group Company. Neither eligibility to participate nor payment of bonus in respect of any previous period gives rise to any right, expectation or entitlement for the Executive to receive any future payment or as to the amount of any such payment. The Company and the Parent Company, as applicable, reserve the right to amend the terms of such Incentive Compensation Plan at any time, including during any performance period. Any Incentive Compensation Plan paid will not be taken into account in calculating pension contributions under clause 9. The Executive acknowledges that it is possible that the Company may exercise its discretion to award to him nil Incentive Compensation. Without limiting the foregoing, the Executive acknowledges that he is not eligible to receive any discretionary cash bonus in respect of 2017.
|
(c)
|
At any time, the Company may deduct all or part of any sums owed by the Executive to the Company or any Group Company including, but not limited to, any outstanding loans, advances, the cost of repairing any damage or loss to the Company’s property caused by him or salary paid in respect of excess holiday taken at the Termination Date from any sums due from the Company to the Executive (whether during the Employment or after the Termination Date) and without prejudice to the Company’s other rights and remedies.
|
(d)
|
Equity
. During the Employment, the Executive will be eligible to participate in all long-term equity incentive programs made available to other executive officers and that are established by the Company for its employees, including the 2015 Omnibus Incentive Compensation Plan (or a successor thereto) of the Parent Company, at levels determined by the Compensation Committee in its sole discretion commensurate with the Executive’s position. All equity grants made to the Executive will vest in accordance with a vesting schedule that is consistent with other grants under the 2015 Omnibus Incentive Compensation Plan (or successor plan) of the Parent Company and will be subject in all respects to the terms of the 2015 Omnibus Incentive Compensation Plan (or successor plan) of the Parent Company and the agreement evidencing such grant.
|
8
|
Benefits
. On completing the Probationary Period to the Company’s satisfaction, the Executive shall be entitled to participate in any and all benefit programs and arrangements generally made available by the Parent Company and Company to executive officers, including, but not limited to, pension plans, private medical cover, death in service benefit and life insurance plans for which the Executive may be eligible during the Term.
|
9
|
Pension and life assurance.
|
(a)
|
The Executive may become a member of the Company’s Group Personal Pension Plan, subject to satisfying the eligibility criteria and subject always to the rules of the plan from time to time. Full details of the plan can be obtained from Human Resources.
|
(b)
|
The Company will comply with the employer pension duties in respect of the Employment in accordance with Part 1 of the Pensions Act 2008 and such other statutory duties as may arise from time to time.
|
(c)
|
A contracting-out certificate pursuant to the provisions of the Pension Schemes Act 1993 is not in force for the Employment.
|
(d)
|
The Company will provide the Executive with life assurance cover to assure a sum equal to four times his Base Salary, payable if he dies during the Employment subject to HM Customs & Revenue limits and to clause 12 (
Conditions Applicable to Insured Benefits
).
|
10
|
Private Medical Insurance Scheme
. Subject to clause 12 (Conditions Applicable to Insured Benefits), the Executive and eligible family members are eligible to join the Company’s private medical insurance scheme.
|
11
|
Permanent Health Insurance
. Subject to clause 12 (Conditions Applicable to Insured Benefits), the Executive is eligible to join the Company’s permanent health insurance scheme, subject to the terms and conditions of the scheme, in force from time to time. The provision of permanent health insurance does not restrict the Company’s rights to terminate the Executive’s Employment in accordance with the terms of this Agreement. All rights of the Executive to receive salary and
|
12
|
Conditions Applicable to Insured Benefits.
|
(a)
|
The terms of this clause 12 apply to the benefits referred to in clauses 9 (Pension and Life Assurance), 10 (Private Medical Insurance Scheme) and 11 (Permanent Health Insurance) (the Insured Benefits).
|
(b)
|
The Executive’s participation in the Insured Benefits is subject to the terms of the relevant scheme in force from time to time. The Executive acknowledges that the decision on whether, and if so, to what extent, benefits may be provided to him in respect of Insured Benefits will be taken by the scheme insurer. The Executive agrees that he will have no claim against the Company or any Group Company relating to the provision of Insured Benefits.
|
(c)
|
The Executive’s participation in the Insured Benefits (and any other insurance-related benefit scheme in which he may participate from time to time) is subject to the normal underwriting requirements of the relevant scheme in force from time to time.
|
(d)
|
The Executive will not be eligible for any Insured Benefit in respect of which cover is not available from the Company’s chosen insurer or is only available from such insurer subject to additional premiums or conditions.
|
(e)
|
Eligibility for some benefits is conditional on the Executive being an employee of the Company either at a specified time (or times), or for a period (or periods) in respect of which benefit is paid. For the avoidance of doubt, the Company may dismiss the Executive at any time, and for any reason in accordance with the terms of this Agreement, even if this results in the Executive losing any current or prospective entitlement to any Insured Benefits.
|
(f)
|
The Insured Benefits are provided subject to the terms, including for the avoidance of doubt, eligibility criteria, of the insurance policies taken out by the Company and in force from time to time. The Company will not provide any Insured Benefit if the relevant insurer does not accept its liability to make the relevant payment under the terms of the relevant policy. Copies of the relevant policies are available on request.
|
(g)
|
Third party providers (e.g. insurers or pension providers) may from time to time provide additional information to the Executive. The Company does not accept responsibility for the accuracy of any such third party information and such information does not form part of the Executive’s contract of employment.
|
(h)
|
The Company may vary, replace or withdraw the provision of any of the Insured Benefits at its absolute discretion. The Company will be under no obligation to provide any compensation or any other benefit if it, at any time and for any reason, exercises such discretion.
|
13
|
Holiday
.
|
(a)
|
The Company’s holiday year runs from 1 January to 31 December each year (
Holiday Year
). The Executive is entitled to a minimum 25 days paid annual holiday during each complete Holiday Year.
|
(b)
|
In addition to his annual holiday entitlement, the Executive is entitled to paid holiday in respect of the usual 8 public holidays in England and Wales. The Company reserves the right to require the Executive to work on a public holiday from time to time. The Executive will be given one day’s paid leave in lieu of such public holiday and for which he will be paid at the rate of his Base Salary.
|
(c)
|
All holidays must be approved in advance by the Chief Executive Officer of the Parent Company. The Executive must comply with the Company’s holiday request procedure in respect of any proposed holiday dates, as outlined in the Employee Handbook from time to time.
|
(d)
|
For the purposes of calculating holiday entitlement during the year in which the Employment with the Company commences or terminates, annual entitlement will be pro-rated and rounded up to the nearest half day, based on the number of completed months’
service during that Holiday Year.
|
(e)
|
If, on the termination of the Employment with the Company for whatever reason, the Executive has taken more holiday than his accrued entitlement at such date, the Company shall be entitled to deduct from any payments due to him, an amount in respect of holidays taken in excess of the Executive’s accrued entitlement. If the holiday the Executive has taken is less than his accrued pro-rated entitlement, he will be entitled to be paid in lieu in respect of such accrued but unused holiday entitlement subject to the terms of this Agreement. One day’s holiday pay is calculated as 1/260
th
of Base Salary.
|
(f)
|
The Company shall not pay in lieu of untaken holiday except on termination of employment. The Executive may only carry forward untaken holiday entitlement from one Holiday Year to the next to the extent permitted by Company policy as in effect from time to time.
|
(g)
|
The Company may require the Executive to take any unused holiday during any notice period given to terminate this Agreement.
|
14
|
Expenses.
During the Employment, the Executive will be reimbursed for travel, entertainment and other out-of-pocket expenses reasonably incurred by the Executive on behalf of the Company in the performance of the Executive’s duties hereunder, so long as (a) such expenses are consistent with the type and amount of expenses that customarily would be incurred by similarly situated corporate executives in the UK; and (b) the Executive complies with the Company’s policies with respect to travel and expenditure, to include the timely provision of receipts for expenses.
|
15
|
Adherence to Company Policy.
In addition to the terms of this Agreement, the Executive is bound by such other of the Company’s employment, compliance and workplace policies and procedures, notified to him from time to time, to the extent that these impose obligations on him, including, but not limited to, those set out in any Employee Handbook or Compliance Manual.
|
16
|
Sickness Absence and Reporting.
|
(a)
|
The Executive agrees to submit to a medical examination, at any time, if asked to do so by the Company. The Company will nominate a medical practitioner and meet all relevant charges. The Executive consents to the disclosure by such medical practitioner of the results of such examination to the Company, subject to the provisions of the Access to Medical Reports Act 1988 (if applicable).
|
(b)
|
If the Executive does not perform his duties for seven consecutive calendar days or more because of ill-health or injury, he will provide the Company with a medical certificate.
|
(c)
|
The Company will pay the Executive statutory sick pay in accordance with the Social Security Contributions and Benefits Act 1992. Any sick pay paid to the Executive in excess of statutory sick pay will be at the absolute discretion of the Company and will be deemed to include statutory sick pay.
|
(d)
|
If the Executive receives compensation for loss of earnings from a third party or health insurance scheme relating to a period during which he received or is receiving any payments from the Company, the Company may reduce any future amounts payable to him to reflect that compensation.
|
17
|
Termination.
|
(a)
|
Incapacity
. The Company may terminate the Executive’s employment immediately if, as a result of ill-health or injury absence, the Executive is prevented from performing his duties for an aggregate period of more than 75% of the working days in any period of 6 consecutive months.
|
(b)
|
Death
. The Executive’s employment with the Company will terminate upon the death of the Executive
.
|
(c)
|
Termination with Cause
. The Company may terminate the Executive’s employment at any time for Cause by providing written notice of such termination to the Executive. “
Cause
” means any of the following, as determined by the Board:
|
(i)
|
the Executive is guilty of dishonesty, or other gross misconduct, or gross incompetence or commits any serious or persistent breach of the terms of this Agreement, including, but not limited to, any breach of clause 26 (
Regulatory Obligations
); or
|
(ii)
|
the Executive acts in any way (whether in the course of his Employment or not) which, in the reasonable opinion of the Board brings or may bring him or the Company or any Group Company into disrepute; or
|
(iii)
|
the Executive becomes bankrupt, applies for or has a receiving order under Section 286 Insolvency Act 1986 made against him, or has any order made against him to reach a voluntary arrangement as defined by Section 253 of that Act; or
|
(iv)
|
the Executive is of unsound mind; or
|
(v)
|
the Executive engages in conduct which, in the opinion of the Board is unacceptable, or performs his duties in a manner which in the opinion of the Board is unacceptable, or
|
(vi)
|
the Executive is convicted of a criminal offence (other than a road traffic offence not punishable by imprisonment); or
|
(vii)
|
the Executive commits an offence under the Bribery Act 2010; or
|
(viii)
|
the continued employment of the Executive contravenes section 8 of the Asylum and Immigration Act 1996.
|
(d)
|
Termination Without Cause
. The Company, at the direction of the Board, may terminate the Employment without Cause at any time upon no less than 90 days’ prior written notice or payment in lieu of notice pursuant to clause 3(b) above; provided, that, notwithstanding the foregoing, the Executive’s employment may be terminated at any time during the Probationary Period on one week’s prior written notice.
|
(e)
|
Resignation for Good Reason
. The Executive may resign from his Employment with the Company for Good Reason by providing written notice to the Chief Executive Officer of the Parent Company that an event constituting Good Reason has occurred and the Executive desires to resign from his Employment as a result. Such notice must be provided to the Chief Executive Officer of the Parent Company by the Executive within 60 days following the initial occurrence of the event constituting Good Reason. After receipt of such written notice, the Chief Executive Officer of the Parent Company shall have a period of 30 days to cure such event;
provided
,
however
, the Chief Executive Officer of the Parent Company, may, at his or her sole option, determine not to cure such event and accept the Executive’s resignation, effective 30 days following such Chief Executive Officer’s receipt of the Executive’s notice that an event constituting Good Reason has occurred. If, in the reasonable judgment of the Executive, the Chief Executive Officer of the Parent Company does not cure the event constituting Good Reason within the requisite 30-day period, the Executive’s employment with the Company shall terminate on account of Good Reason 30 days following the expiration of such Chief Executive Officer’s cure period, unless the Chief Executive Officer of the Parent Company determines to terminate the Employment prior to such date. As used herein, “
Good Reason
” means that, without the Executive’s consent, any of the following has occurred:
|
(i)
|
a material diminution in the Executive’s authority, duties, responsibilities or job title;
|
(ii)
|
a relocation of the Company’s principal offices in London to a location that is not within the United Kingdom; or
|
(iii)
|
any action or inaction by the Company that constitutes a material breach by the Company of its obligations under this Agreement.
|
(f)
|
Resignation without Good Reason
. The Executive may resign from his Employment with the Company without Good Reason (as that term is defined in clause 17(e)) at any time upon no less than 90 days’ prior written notice to the Chief Executive Officer of the Parent Company. Upon such notice of resignation, the Company may, at its sole option, accept the Executive’s resignation effective as of a date prior to the resignation date specified in the notice, and in such event, the earlier date will be the Termination Date.
|
18
|
Compensation Upon Termination.
|
(a)
|
Termination after the Probationary Period without Cause or Due to Incapacity or Death; Resignation with Good Reason
. Upon termination of Employment at any time after the end of the Probationary Period pursuant to clauses 17(a), 17(b), 17(d) or 17(e), the Executive (or his estate, as applicable) will receive any Base Salary accrued and unpaid as at the Termination Date, any sums due pursuant to clause 13 (if any) and appropriate expense reimbursements as soon as practicable after the Termination Date. In addition, subject to the Executive’s (or his estate’s, as applicable) execution of a statutory settlement agreement on terms satisfactory to the Company and execution and non-revocation of the general release of claims on terms satisfactory to the Company, as well as the Executive’s compliance with clause 23 (
Restrictions After Employment
), Schedule 1, clause 19 (
Confidentiality)
and any other provisions which are expressed to apply on and following termination of Employment in this Agreement, the Company will also pay to the Executive (or his estate) an amount equal to 12 months of the Executive’s monthly Base Salary, which shall be paid in accordance with the Company’s normal payroll practices in equal installments over the 12-month period following Executive’s last day of employment and which shall commence as soon as administratively practicable following the expiration of the revocation period for the general release, but not later than 60 days following the date of Executive’s last day of employment with the Company. The Company shall have no further obligations under this Agreement to the Executive (or his estate, as applicable).
|
(b)
|
Termination During Probationary Period or with Cause; Resignation without Good Reason
. If (i) the Company terminates the Employment during the Probationary Period for any reason or, after the end of the Probationary Period, with Cause pursuant to clause 17(c), (ii) the Executive resigns without Good Reason pursuant to clause 17(f), or (iii) the Executive is entitled to the severance benefits pursuant to clause 18(a) and either he or his estate, if applicable, does not execute a statutory settlement agreement on terms satisfactory to the Company or does not execute or revokes a general release of claims on terms satisfactory to the Company, or is in material breach of clause 23 (
Restrictions After Employment
), Schedule 1, clause 19 (
Confidentiality)
and any other provisions which are expressed to apply on and following termination of Employment in this Agreement, then the Company will pay the Executive his Base Salary accrued and unpaid as of the Termination Date, any sums due under clause 13 (if any) and unpaid as of the Termination Date and appropriate expense reimbursements as soon as practicable and, following such payments, the Company shall have no further obligations under this Agreement to the Executive.
|
(c)
|
Nonrenewal of this Agreement
. If the Executive or the Company provides written notice of non-renewal of this Agreement in accordance with clause 3 above, termination of the Employment in connection with the non-renewal of this Agreement shall not be deemed a termination without Cause or a resignation for Good Reason and no payments or severance benefits under clause 18 of this Agreement will be payable to the Executive.
|
19
|
Confidentiality.
|
(a)
|
During his Employment, the Executive will not use or disclose, directly or indirectly, any trade secrets or Confidential Information belonging to the Company or any Group Company, except to allow him to carry out his duties properly or as required by law.
|
(b)
|
The obligations contained in this clause 19 will continue to apply to the Executive after his Employment ends, for so long as the information referred to in clause 19 remains confidential.
|
(c)
|
During his Employment, the Executive will not make or store (in any form including on any website or web based database or networking site) any notes or memoranda relating to any aspect of the business of the Company or any Group Company (
Memoranda
) which are not for the benefit of the Company or Group Company. All Memoranda made by the Executive will belong to the Company.
|
(d)
|
The Company and any Group Company may, from time to time be entrusted with confidential or proprietary information, trade secrets or intellectual property belonging to third parties (
Third Party Confidential Information
). The Executive will comply with any contractual undertakings or obligations which the Company or any Group Company imposes on employees in respect of Third Party Confidential Information. The Executive will enter into any confidentiality undertaking with any third party that the Company or any Group Company may require.
|
20
|
Garden Leave
|
(a)
|
At any time after the Company or the Executive has given notice to terminate the Employment, the Company may exercise all or any of the following rights:
|
(i)
|
change the Executive’s duties in whatever way it decides is appropriate;
|
(ii)
|
totally withdraw all the Executive’s powers and responsibilities;
|
(iii)
|
withdraw or limit the access of the Executive to any of the IT or other systems of the Company or any Group Company;
|
(iv)
|
require that the Executive does not contact or communicate with any current, past or prospective clients, employees or suppliers of the Company or any Group Company about any aspect of the business of the Company or any Group Company;
|
(v)
|
prohibit the Executive from entering any premises of the Company or any Group Company;
|
(vi)
|
require the Executive to carry out his duties (including those specified in this clause) from home;
|
(vii)
|
appoint another person or persons to act jointly with the Executive in discharging his duties (whether as an employee or officer of the Company or any Group Company) to replace the Executive in any office from which he has resigned;
|
(viii)
|
require the Executive to assist in a proper handover of his duties and responsibilities (including clients, prospects and business) to another employee of the Company;
|
(ix)
|
require the Executive to keep the Company informed of his whereabouts so that he may be called upon to perform any duties as required by the Company;
|
(x)
|
require that the Executive complies with any or all of his obligations under clause 22 (
Return of Property
),
|
(b)
|
At any time during the Garden Leave Period, the Board may require the Executive to resign immediately from any directorship or other office that he may hold with the Company and any Group Company.
|
(c)
|
During any Garden Leave Period, unless the Chief Executive Officer of the Parent Company agrees otherwise, the Executive will not:
|
(i)
|
do any work, whether paid or unpaid, for any third party;
|
(ii)
|
hold himself out as a director or other officer of the Company or any Group Company if he no longer holds office with such company;
|
(iii)
|
make any comment to any person about the change to his duties, except to confirm that he is on Garden Leave.
|
(d)
|
The Executive acknowledges that he will remain employed by the Company on the terms of this Agreement during any Garden Leave Period and, in particular, he remains bound by the express obligations contained in this Agreement except as varied by this clause 20 and by the implied obligations of honesty, loyalty and good faith and confidentiality owed by an employee to his employer. The Executive will make himself available to the Company and any Group Company, in person, on the telephone or otherwise as the Company may direct, during normal working hours.
|
(e)
|
If the Executive fails to make himself available to work during any Garden Leave Period other than as agreed with the Chief Executive Officer of the Parent Company, the Company may deduct one day’s salary for each day of absence during such notice period and without prejudice to the rights of the Company in respect of breach by the Executive of the terms of this Agreement.
|
(f)
|
The Company will continue to pay the Executive’s Base Salary and provide contractual benefits during any Garden Leave Period as long as he complies with his obligations under this Agreement.
|
(g)
|
During the Garden Leave Period, the Company reserves the right to terminate the employment of the Executive by giving notice to make a payment to the Executive in lieu in accordance with clause 3(b) above in respect of any unexpired period of notice given or deemed by the Company to be given.
|
(h)
|
The Company’s rights under this clause are distinct from the Company’s right to suspend the Executive to investigate any allegations against him in accordance with subsection 20(i) below
(
Suspension
).
|
(i)
|
Suspension.
The Company may suspend the Executive for a reasonable period to investigate any allegations of the Executive’s involvement in any allegation of Cause or any misconduct or alleged breach of the terms of this Agreement
and pending any disciplinary decision. During any period of suspension, the Executive will continue to receive his Base Salary and contractual benefits provided that he remains ready, willing and able to work. For the avoidance of doubt, if the Executive is not available for work through sickness, ill-health or otherwise, then he shall have no right to receive his Base Salary or contractual benefits save as set out in this Agreement. During the period of suspension, the Executive will not attend work but will provide whatever
|
21
|
Inventions, Ideas, Processes and Designs.
|
(a)
|
The Executive acknowledges that in the course of the Employment and as part of his duties he may conceive or make, individually or with others, certain inventions, ideas, discoveries, developments, writings, designs, drawings, improvements and innovations, whether or not patentable, or capable of registration (collectively
Inventions
); and he may develop or produce, individually or with others, certain works in which copyright and/or unregistered design right will subsist in various media, including but not limited to electronic materials (collectively,
Creative Works
), and agrees that he will promptly disclose in writing to the Company all Inventions and Creative Works.
|
(b)
|
Intellectual Property
means patents, trademarks and service marks, rights in designs, trade or business names, copyrights (including rights in computer software), database rights (whether or not any of these are registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world.
|
(c)
|
The Executive acknowledges that any Inventions or Creative Works and any and all Intellectual Property subsisting or which may in the future subsist in such Inventions or Creative Works whether or not conceived or made during working hours, including, without limitation, those which:
|
(i)
|
relate in any manner to the business of the Company or any Group Company or to its actual or demonstrably anticipated activities; or
|
(ii)
|
result from or are made in the course of the Executive’s employment by the Company; or
|
(iii)
|
involve the use of any equipment, supplies, facilities, Confidential Information, documents, Intellectual Property or time of the Company or any other Group Company,
|
(d)
|
The Executive agrees that, without limitation to the foregoing:
|
(i)
|
any Invention disclosed by the Executive to a third person or described in a patent or registered design application filed by the Executive or on the Executive’s behalf; and
|
(ii)
|
any Creative Work disclosed to a third person, published or the subject of an application for copyright or other registration filed by the Executive or on the Executive’s behalf,
|
(e)
|
The Executive hereby irrevocably waives any rights which he may have in the Inventions or the Creative Works which are or have been conferred on him by chapter IV of Part I of the Copyright, Designs and Patents Act 1988 headed “Moral Rights” and by any other laws of a similar or equivalent nature in any of the countries of the world.
|
(f)
|
The Executive will also, at the Company’s request and expense, execute specific assignments of any Inventions or Creative Works and execute, acknowledge and deliver such other documents and take such further action as the Company may require, at any time during or subsequent to the period of the Employment, to vest or evidence title in Inventions or Creative Works in the Company (or as it may direct) and to obtain, maintain and defend the Intellectual Property in the Inventions or Creative Works in any and all countries or to otherwise give effect to the provisions of this Agreement.
|
(g)
|
The Executive hereby irrevocably appoints the Company to be his attorney in his name and on his behalf to execute and do any such instrument or thing and generally to use his name for the purpose of giving to the Company or its nominee the full benefit of the provisions of this clause 21 and acknowledges in favour of any third party that a certificate in writing signed by any Director or the Secretary of the Company that any instrument or act falls within the authority hereby conferred shall be conclusive evidence that such is the case.
|
22
|
Return of Property.
|
(a)
|
At any time during the Employment, including during any Garden Leave Period, the Company may require the Executive to (and will in any event on the termination of the Employment) for whatever reason:
|
(i)
|
return promptly to the Company all Confidential Information and all original and copy books, documents, records, correspondence, papers, information, software, data, and any other information-storing medium belonging or relating to the business of the Company or any Group Company; and any other property, equipment, keys, hardware belonging to the Company or any Group Company or belonging to any third party which has provided such property to the Company or any Group Company for the use of that company which is in his possession or under his control.
|
(ii)
|
permanently delete from any mobile telephone, personal or laptop computer, PDA, tablet or other mobile device, any internet or web-based account or facility (including any business or social networking site, including but not limited to LinkedIn, Facebook, Google + or Twitter) (“
Relevant Media”
) or other information storing medium all data, client or prospective client or customer contact details or profiles, documents and information belonging to or obtained from or prepared for the Company or any other Group Company or any of its or their respective customers, clients, investors or advisers.
|
(b)
|
During or at any time after the Employment ends, the Executive will co-operate with any request from the Company to disclose, provide and facilitate access (including by providing passwords) to any Relevant Media or other website or web based directory, any computer, mobile device, organiser or other equipment in his possession, or under his control, which contains Confidential
|
(c)
|
The Executive will confirm in writing that he has complied fully with his obligations under this clause, if required to do so by the Company.
|
23
|
Restrictions After Employment
.
|
(a)
|
The Executive recognises that, whilst performing his duties for the Company and any Group Company, he will have access to trade secrets and confidential information belonging to the Company and Group Companies and will obtain personal knowledge of and influence over its or their clients, partners, suppliers and employees. The Executive therefore agrees that the restrictions in Schedule 1 of this Agreement are reasonable and necessary to protect the legitimate business interests of the Company and Group Companies.
|
(b)
|
The Executive agrees that if he receives any offer of employment or other work, either during the Employment or during the Restricted Period (as defined in Schedule 1 of this Agreement), he will give the person offering the employment or other work a copy of this Agreement and will draw their attention to clauses 24 (
Other Activities during Employment
), 20 (
Garden Leave
) and 23 (
Restrictions after Employment
) and to Schedule 1 in particular.
|
24
|
Other Activities During Employment.
|
(a)
|
During his Employment the Executive will not, in any capacity, be involved in providing services, directly or indirectly, to any other person in respect of any other business, trade or occupation unless he has first obtained the prior written consent of the Chief Executive Officer of the Parent Company.
|
(b)
|
The restriction in clause 24(a) will not prevent the Executive from holding up to 3% of any securities in any company, whether or not the securities are quoted on any recognised investment exchange.
|
(c)
|
The Executive will not during the Employment without the prior written consent of the Chief Executive Officer of the Parent Company whether alone or jointly with or on behalf of any person whether directly or indirectly and in any capacity be involved in the preparation, planning, creation or establishment of any business which competes or intends to compete with any business of the Company or any Group Company in which the Executive is or has been involved at any time in the course of the Employment.
|
25
|
Use of Business or Social Media.
|
(a)
|
The Executive may in the course of the Employment use or access internet or web-based accounts or facilities (including any Relevant Media (as defined above)) provided that:
|
(i)
|
all accounts used or held by him in Relevant Media must be separate and distinct from any personal accounts used or held by him in Relevant Media;
|
(ii)
|
all data or information held or maintained by him in Relevant Media shall be the property of the Company;
|
(iii)
|
all data or information held or maintained by him in Relevant Media must be backed up or stored on and properly accessible through the internal database or systems of the Company;
|
(iv)
|
he must maintain and update a record of all Relevant Media and report and regularly update such records to be sent in writing to the Company each Relevant Media account which the Executive opens; all user details, logins, passwords or similar held by you from time to time in respect of any Relevant Media; and each Relevant Media account which you close.
|
26
|
Regulatory Obligations.
|
(a)
|
It is a condition of the Employment that, if and insofar as is applicable to the Executive, he is and remains, at all material times, a fit and proper person for the purposes of the FCA Handbook of Rules and Guidance and any similar regulatory requirements (FCA Handbook) and that the Executive will observe and comply with all policies and compliance rules of the Company or any Group Company applicable to employees generally as in effect from time to time.
|
(b)
|
Without prejudice to the other terms of this Agreement:
|
(i)
|
the Company will be entitled to summarily terminate the Employment without notice or payment in lieu of notice in the event that the Executive should cease to be a fit and proper person for the purposes of the FCA Handbook;
|
(ii)
|
the Executive will comply with the principles governing the conduct of individual employees in controlled positions as set out from time to time in the FCA Handbook;
|
(iii)
|
the Executive will comply with and assist the Company and any Group Company in ensuring compliance with the regulatory obligations imposed upon it (or them) and their employees from time to time including under the FCA Handbook;
|
(iv)
|
if the Executive is found to have submitted any false or misleading information to the Company in connection with his application for employment with the Company or its predecessor, then the Company may terminate the Employment summarily and without notice or payment in lieu of notice;
|
(v)
|
the Executive will attend such training courses, lectures and workshops as the Company may from time to time reasonably require for the purpose of maintaining his skills, knowledge and expertise, including those set out in the FCA Handbook applicable to him from time to time;
|
(vi)
|
the Executive will promptly bring to the attention of the Company any breach of FCA or other regulatory guidelines, rules or principles whether such breach has been committed by him or another person.
|
27
|
Data Protection.
|
(a)
|
The Executive confirms he has read and understood the Company's Communications Systems Policy and other IT policies relating to data protection, copies of which are set forth on the MyGAIN Internet portal maintained by the Parent Company. The Company may change these policies at any time and will post updated policies as appropriate.
|
(b)
|
The Executive consents to the Company and any Group Company holding and processing (both electronically and manually) personal data, including sensitive personal data (“
Data”
), relating to him for the purposes of business, personnel and pensions administration and management and for compliance with any laws and regulations applicable to the Company or any Group Company.
|
(c)
|
For the purposes of the Data Protection Act 1998 (“
DPA”
), the Company is a Data Controller and may process personal data during the course of the Executive’s Employment to enable it to carry out its function properly. The Executive authorises the Company in accordance with the provisions of the DPA and any regulations made under it to process Data relating to him and, where appropriate, to transfer process and store such Data outside the European Economic Area (as defined from time to time).
|
(d)
|
The Company will from time to time engage third parties (“
Data Processors”
) to store, manage and process Data both within and outside the European Economic Area. The Executive authorises the Company as Data Controller in accordance with the provisions of the DPA and any regulations made under it to utilise Data Processors as and when required.
|
28
|
Severability
. The provisions of this Agreement and the attached Schedules are severable. If any provision (or any identifiable part of any provision) is held to be invalid or unenforceable by any court of competent jurisdiction, then such invalidity or unenforceability will not affect the validity or enforceability of the remaining provisions.
|
29
|
Statutory Particulars
. The statutory particulars of employment to which the Executive is entitled under the Employment Rights Act 1996 are contained in this Agreement and the attached schedule 2.
|
30
|
Third Parties
. Only the parties to this Agreement and any Group Company may enforce and take the benefit of this Agreement in accordance with the Contracts (Rights of Third Parties) Act 1999, subject to the terms of this Agreement. Pursuant to the Contracts (Rights of Third Parties) Act 1999, no other person may enforce the terms of this Agreement against the Company.
|
31
|
Unfair Contract Terms Act 1977
. The Executive acknowledges that he has had the opportunity to receive independent legal advice on the terms of this Agreement prior to entering into this Agreement and, in the light of that advice the Executive acknowledges that the terms of the Agreement are reasonable in the circumstances.
|
32
|
Complete Agreement
. This Agreement embodies the entire agreement of the parties with respect to the Executive’s employment, compensation, benefits and related items and supersedes any other prior oral or written agreements, arrangements or understandings between the Executive and the Company. The Executive confirms that he has not been persuaded to enter into this Agreement by any representation which is not set out in the Agreement. The Executive waives all his rights arising from any representation given in connection with this Agreement, other than his rights to claim a
|
33
|
Waiver
. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such party.
|
34
|
Governing Law
. This Agreement will be governed by and construed in accordance with the laws of England and each of the parties submits to the exclusive jurisdiction of the English courts.
|
35
|
Notices
. Any notice to be given under this Agreement must be given in writing. Notice given to the Company must be delivered by hand or by first class post addressed to the General Counsel of the Parent Company
at Bedminster One, Suite 11, 135 US Hwy 202/206, Bedminster New Jersey, United States of America, 07921. Notice given to the Executive must be given to him personally or sent by first class post to his last known residential address. The Executive must inform the Company in writing of his residential address for the time being. Notices served by post will be deemed to be served on the second business day after the date of posting.
|
36
|
Counterparts
. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.
|
1
|
The Executive agrees that, during the period of twelve months following the Termination Date (reduced by a period equal to the length of any Garden Leave Period imposed in accordance with clause 20
(
Garden Leave
)), he will not be involved, directly or indirectly, whether on his own or in conjunction with any Restricted Person, in any capacity in any business activity which competes or which intends to compete with any Restricted Business.
|
2
|
The Executive agrees that, during the Restricted Period, he will not act in competition with any Restricted Business directly or indirectly, in any capacity by:
|
2.1
|
soliciting or enticing away or endeavouring to solicit or entice away from the Company or any Group Company any Client, Prospective Client, Partner or Prospective Partner;
|
2.2
|
doing business with, or otherwise dealing with, any Client, Prospective Client, Partner or Prospective Partner;
|
2.3
|
soliciting or enticing away from or endeavouring to solicit or entice away from the Company or any Group Company any Key Employee;
|
2.4
|
employing or engaging or otherwise facilitating the employment or engagement of any Key Employee;
|
2.5
|
interfering with the arrangements between the Company or any Group Company and any Supplier.
|
3
|
The Executive agrees that he will not at any time following the Termination Date:
|
3.1
|
Represent himself as being connected with the Company or any Group Company in any capacity;
|
3.2
|
make or cause to be made to any person in any circumstances any comments which are (or which might reasonably be considered to be) disparaging or derogatory of the Company or any Group Company or any of its or their respective officers, employees, consultants, shareholders or agents.
|
4
|
If at any time prior to the expiration of the Restricted Period the Executive receives any offer from or on behalf of any third party to be involved (or if he is engaged in any discussions with any third party with a view to being involved) in any capacity in any business or concern which competes (or which intends to compete) with the Company or any Group Company, the Executive shall forthwith provide to such third party a copy of this Schedule and shall inform the Company in writing of the identity of such third party as soon as reasonably practicable following acceptance of any offer of or agreement to any such involvement.
|
5
|
The Company accepts, as trustee for each Group Company, the benefit of all undertakings given by the Executive in this Schedule to any Group Company.
|
6
|
The provisions of this Schedule shall apply only in respect of any business of the Company or any Group Company in respect of which the Executive was either materially involved or in respect of which the Executive had access to Confidential Information or for which the Executive was responsible at any time during the Relevant Period.
|
7
|
None of the restrictions in this Schedule shall prevent the Executive from holding an investment by way of shares or other securities of not more than 3% of the total issued share capital of any company, whether or not listed or dealt in on a recognised stock exchange.
|
8
|
The provisions of this Schedule are severable and if any provision or identifiable part is held to be unenforceable by any court of competent jurisdiction, then such unenforceability shall not affect the enforceability of the remaining provisions or identifiable parts of this Schedule. Whilst the restrictions and defined expressions in this Schedule are regarded by the parties as fair and reasonable, if any such provision is held to be unreasonably wide but would be valid if part of the wording were deleted, that restriction or definition will apply with so much of the wording deleted as may be necessary to render it valid.
|
9
|
For the purposes of this Schedule, the following words have the meanings set out below:
|
(a)
|
has, at the Termination Date, arrangements in place pursuant to which the Company or any Group Company supplies goods or services; or
|
(b)
|
with whom the Company or any Group Company has been in the habit of dealing at any time during the Relevant Period; and
|
(c)
|
in relation to whom the Executive had access to Confidential Information at any time during the Relevant Period; or
|
(d)
|
with whom the Executive has had personal contact or dealings in the course of his Employment at any time during the Relevant Period;
|
(a)
|
who reported to the Executive; or
|
(b)
|
who had material contact with clients or suppliers of the Company or any Group Company in the course of his or her employment; or
|
(c)
|
who was a member of the Board or reported directly to a member of the Board; or who was a member of the senior management team of the Company or any Group Company; or
|
(d)
|
whose job duties involved research and development to a material extent; and
|
(e)
|
who, by reason of his or her seniority and expertise, knowledge of trade secrets and Confidential Information, or knowledge of and influence over Clients or Prospective
|
(a)
|
with whom the Executive has had personal contact or dealings in the course of his Employment at any time during the Relevant Period; or
|
(b)
|
in relation to whom the Executive had access to Confidential Information at any time during the Relevant Period.
|
(a)
|
with whom the Executive has had personal contact or dealings in the course of his Employment at any time during the Relevant Period; or
|
(b)
|
in relation to whom the Executive had access to Confidential Information at any time during the Relevant Period.
|
1.
|
Continuity of Employment
|
(a)
|
The Executive’s statutory period of continuous employment with the Company began on 3 November 2017.
|
(b)
|
No other period of employment with any previous employer will be treated as continuous with the Executive’s Employment by the Company.
|
2.
|
Grievance and Dismissal
|
(a)
|
If the Executive has a grievance relating to his Employment, he should raise it in the first instance with the Chief Executive Officer of the Parent Company. If the matter is not satisfactorily resolved, he may raise it with the Chairman of the Board, whose decision will be final.
|
(b)
|
There is no formal disciplinary procedure applicable to the Executive’s Employment. If he is dissatisfied with any disciplinary decision taken against him he should appeal to the Chairman of the Board. The Chairman’s decision will be final.
|
(c)
|
For the avoidance of doubt, the grievance, dismissal and disciplinary procedures of the Company from time to time in force do not form part of the contract of employment of the Executive or otherwise have contractual force and effect unless otherwise stated.
|
3.
|
Collective Agreements
|
Entity Name
|
Jurisdiction of Incorporation
|
GAIN Capital Holdings Ltd.
|
England and Wales
|
GAIN Capital UK Limited
|
England and Wales
|
GAIN Capital Australia Pty. Ltd.
|
Australia
|
GAIN Capital Singapore Pte. Ltd.
|
Singapore
|
GCAM, LLC
|
Delaware
|
GAIN Holdings, LLC
|
Delaware
|
GAIN Capital Group, LLC
|
Delaware
|
S.L. Bruce Financial Corporation
|
Ohio
|
GAIN Capital Securities, Inc.
|
Delaware
|
GAIN Capital Holdings International, LLC
|
Delaware
|
GAIN Global Markets, Inc.
|
Cayman Islands
|
Island Traders (Cayman), Limited
|
Cayman Islands
|
GAIN Capital-Forex.com Hong Kong, Ltd.
|
Hong Kong
|
GAIN Capital Japan Co., Ltd.
|
Japan
|
GAIN Capital-Forex.com U.K., Ltd.
|
England and Wales
|
GAIN Capital-Forex.com Canada, Ltd.
|
Canada
|
GAIN GTX, LLC
|
Delaware
|
GAIN GTX, Singapore Pte. Ltd.
|
Singapore
|
GAIN Capital Holdings International, B.V.
|
The Netherlands
|
GAIN Capital International Finance Company, B.V.
|
The Netherlands
|
GAIN Capital GTX International, B.V.
|
The Netherlands
|
GAIN Capital – Forex.com International, B.V.
|
The Netherlands
|
GAIN Global Markets International, B.V.
|
The Netherlands
|
GAIN Capital – Forex.com Cyprus Ltd.
|
Cyprus
|
GTX SEF, LLC
|
Delaware
|
Global Futures & Forex, Ltd.
|
Michigan
|
Global Asset Advisors, LLC
|
Illinois
|
Top Third AG Marketing, LLC
|
Delaware
|
GAIN Global Markets Bermuda, Ltd.
|
Bermuda
|
Trade Facts Ltd.
|
England
|
GTX Bermuda, Ltd.
|
Bermuda
|
Gain Capital Technology Consulting Hong Kong Limited
|
Hong Kong
|
Gain Capital Payments Ltd.
|
England and Wales
|
City Index Academy Ltd.
|
England and Wales
|
City Index Inc.
|
Delaware
|
FX Solutions LLC
|
New Jersey
|
Jia Rao Network Technology Co. Ltd.
|
China
|
GTX (Switzerland) GmbH
|
Switzerland
|
1.
|
I have reviewed this annual report on Form 10-K of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
Date: March 14, 2018
|
|
|
|
|
|
/s/ Glenn H. Stevens
|
|
|
|
|
|
|
Glenn H. Stevens
|
|
|
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
Date: March 14, 2018
|
|
|
|
|
|
/s/ Nigel Rose
|
|
|
|
|
|
|
Nigel Rose
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
1.
|
The accompanying annual report on Form 10-K for the fiscal year ended December 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Glenn H. Stevens
|
Glenn H. Stevens
Chief Executive Officer and President
(Principal Executive Officer)
|
|
1.
|
The accompanying annual report on Form 10-K for the fiscal year ended December 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Nigel Rose
|
Nigel Rose
Chief Financial Officer
(Principal Financial and Accounting Officer)
|