FXCM Jettisons FXCM Hong Kong to Rakuten Securities

FXCM Inc. (NYSE:FXCM) has revealed that Forex Trading, LLC, a subsidiary of FXCM Newco, LLC, has signed a definitive agreement, in essence selling FXCM Asia Limited (FXCM Hong Kong) to Rakuten Securities, Inc, for $36 million.

Rakuten is one of the five largest foreign exchange (FX) brokers in Japan, itself a subsidiary of Rakuten, Inc., one of the world’s largest Internet services companies. Alternatively, FXCM Hong Kong is FXCM’s regulated entity whose majority of clients are Hong Kong residents.

The recent deal is subject to regulatory approval from the Hong Kong Securities and Futures Commission, as well as a number of customary closing conditions. Both entities are targeting a Q3 closure date for the sale.

Subsequently, Rakuten Securities will continue to utilize the FXCM trading module for FXCM Hong Kong clients under a consequent white label agreement with FXCM – they will be notifying clients upon the formal finalization of the deal.

According to FXCM CEO, Drew Niv, in a recent statement on the sale, “We are pleased to extend our relationship and announce another transaction with Rakuten Sec through the sale of FXCM Hong Kong. This is another positive step towards FXCM completing its plan to sell non-core assets and repay the Leucadia loan.”

“We are delighted to invite FXCM Hong Kong to Rakuten group, followed by FXCM Japan. This is a great opportunity for us to expand our FX business globally,” added said Yuji Kusunoki, President of Rakuten Sec, in an accompanying statement.

FXCM investors have had an eventful few days, despite a shortened trading week in the United States due to the observance of Memorial Day. Tuesday saw a surge in share prices, bouncing off recent 52-week lows seen last Friday, following heavy options purchasing. At the time of writing, FXCM shares (NYSE:FXCM) are trading at $1.53 in pre-market trading ahead of the US open.

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