12. REGULATORY REQUIREMENTS

Group, LLC, the Company’s FCM and RFED subsidiary, is subject to the CFTC Net Capital Rule (Rule 1.17) and NFA Financial Requirements Sections 11 and 12. Under applicable provisions of these rules, Group, LLC is required to maintain adjusted net capital of $20.0 million plus 5.0% of the total payables to customers over $10.0 million. At September 30, 2012, Group LLC maintained $18.56 million more than the minimum required regulatory capital for a total of 1.8 times the required capital and at all times maintained compliance with all applicable regulations.

GCSI is a broker-dealer registered with the SEC under the Securities Exchange Act of 1934, as amended. GCSI is a member of the Financial Industry Regulatory Authority (“FINRA”), Municipal Securities Rulemaking Board (“MSRB”), and Securities Investor Protection Corporation (“SIPC”). Pursuant to the SEC’s Uniform Net Capital Rule 15c3-1, GCSI is required to maintain a minimum net capital balance (as defined) of $0.05 million. GCSI must also maintain a ratio of aggregate indebtedness (as defined) to net capital of not more than 15 to 1. At September 30, 2012, GCSI maintained $0.07 million more than the minimum required regulatory capital for a total of 2.4 times the required capital and at all times maintained compliance with all applicable regulations.

GCUK is registered in the UK and regulated by the Financial Services Authority (“FSA”) as a full scope €730k BIPRU Investment Firm. GCUK is required to maintain the greater of $1.0 million (€730,000) or the Financial Resources Requirement, which is calculated as the sum of the firm’s operational, credit, counterparty, concentration, market and forex risk. The regulatory capital held is required to be in excess of 110% of its requirements at all times. At September 30, 2012, GCUK maintained $21.67 million more than the minimum required regulatory capital for a total of 3.0 times the required capital and at all times maintained compliance with all applicable regulations.

GC Japan is a registered Type I financial instruments business firm regulated by the Japan Financial Services Agency in accordance with Financial Instruments and Exchange Law (Law No. 25 of 1948, as amended). GC Japan is a member of the Financial Futures Association of Japan. GC Japan is subject to a minimum capital adequacy ratio of 120%, which is derived by dividing Net Capital (as defined) by the sum of GC Japan’s market, counterparty credit risk and operational risk. At September 30, 2012, GC Japan maintained $8.26 million more than the minimum required regulatory capital for a total of 3.1 times the required capital and at all times maintained compliance with all applicable regulations.

GCAU holds an Australian Financial Services License issued by the Australian Securities & Investments Commission (“ASIC”). GCAU is required to maintain a minimum capital requirement of $0.05 million (0.05 million AUD) plus 5% of adjusted liabilities between $1.02 million (1 million AUD) and $101.6 million (100 million AUD). At September 30, 2012, GCAU maintained $2.12 million more than the minimum required regulatory capital for a total of 7.4 times the required capital and at all times maintained compliance with all applicable regulations.

GCHK is licensed by the Securities and Futures Commission (“SFC”) to carry out Type 3 Regulated Activity, Leveraged Foreign Exchange Trading. GCHK is subject to the requirements of section 145 of the Securities and Futures Ordinance (Cap.571). Under this rule, GCHK is required to maintain a minimum liquid capital requirement of the higher of $1.925 million or the sum of 1.5% of its aggregate gross foreign currency position and 5% of its adjusted liabilities and clients’ margin calculated in accordance with applicable rules. At September 30, 2012, GCHK maintained $1.63 million more than the minimum required regulatory capital for a total of 1.8 times the required capital and at all times maintained compliance with all applicable regulations.

GAIN Global Markets, Inc. (“GGMI”), the Company’s Cayman Island subsidiary, is a registered securities arranger with the Cayman Islands Monetary Authority (“CIMA”). GGMI is required to maintain a capital level that is the greater of one quarter of relevant annual expenditure, or $100,000. At September 30, 2012, GGMI maintained $0.28 million more than the minimum required regulatory capital for a total of 3.8 times the required capital and at all times maintained compliance with all applicable regulations.

Open E Cry, (“OEC”), Group, LLC’s futures business subsidiary, is subject to the CFTC Net Capital Rule (Rule 1.17). Under applicable provisions of these rules, OEC is required to maintain adjusted net capital of the greater of $1.0 million or 8% of Customer and Non-Customer Maintenance Margin (as defined). At September 30, 2012, OEC maintained $3.6 million more than the required minimum regulatory capital for a total of 3.2 times the required capital and at all times maintained compliance with all applicable regulations.

Gain Capital-Forex.com Canada Ltd (“GCC”) became registered as an investment dealer with the Investment Industry Regulatory Organization of Canada (“IIROC”) in May 2012. GCC is required to maintain a minimum capital requirement of $0.25 million (0.25 million CAD) and comply with applicable margin and securities concentration charges. At September 30, 2012, GCC maintained $1.60 million more than the minimum required regulatory capital for a total of 7.4 times the required capital and at all times maintained compliance with all applicable regulations.

The following table illustrates the minimum regulatory capital our subsidiaries were required to maintain as of September 30, 2012 and the actual amounts of capital that were maintained (amounts in millions):


Entity Name	Minimum Regulatory Capital Requirements		Capital Levels Maintained		Excess Net Capital		Percent of Requirement Maintained
GAIN Capital Group, LLC	$	24.26	$	42.82	$	18.56		177	%
GAIN Capital Securities, Inc.	$	0.05	$	0.12	$	0.07		240	%
GAIN Capital-Forex.com U.K., Ltd.	$	10.83	$	32.50	$	21.67		300	%
Forex.com Japan Co., Ltd.	$	4.02	$	12.28	$	8.26		305	%
GAIN Capital Forex.com Australia, Pty. Ltd.	$	0.33	$	2.45	$	2.12		742	%
GAIN Capital-Forex.com Hong Kong, Ltd.	$	1.93	$	3.56	$	1.63		184	%
GAIN Global Markets, Inc.	$	0.10	$	0.38	$	0.28		380	%
Open E Cry, LLC	$	1.12	$	4.74	$	3.62		423	%
GAIN Capital-Forex.com Canada Ltd.	$	0.25	$	1.85	$	1.60		740	%

	$	42.89	$	100.70	$	57.81		235	%