10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from  to .

Commission File Number 001-35008

GAIN CAPITAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-4568600
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Bedminster One 135 Route 202/206 Bedminster, New Jersey	07921
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (908) 731-0700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)    ý  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    ý  No

As of July 27, 2018, the registrant had 44,642,233 shares of common stock, $0.00001 par value per share, outstanding.

GAIN CAPITAL HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2018

PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	4
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2018 and 2017	5
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the six months ended June 30, 2018 and 2017	7
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	45
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	46
Item 6.	Exhibits	46
SIGNATURES		47

3

PART I – FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements

GAIN CAPITAL HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share data)

	June 30, 2018			December 31, 2017
ASSETS:
Cash and cash equivalents	$	360,312		$	209,688
Cash and cash equivalents held for customers	920,366			978,828
Receivables from brokers	52,335			78,503
Property and equipment, net	36,462			40,742
Intangible assets, net	40,117			61,969
Goodwill	28,182			33,036
Other assets	36,743			45,881
Total assets	$	1,474,517		$	1,448,647
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Liabilities
Payables to customers	$	920,366		$	978,828
Payables to brokers	2,973			2,789
Accrued compensation and benefits	10,623			10,104
Accrued expenses and other liabilities	39,749			33,947
Income tax payable	10,154			599
Convertible senior notes	135,289			132,221
Total liabilities	$	1,119,154		$	1,158,488
Commitments and contingent liabilities
Redeemable non-controlling interests	$	2,562		$	4,411
Shareholders’ equity
Common stock ($0.00001 par value; 120 million shares authorized, 54,323,940 shares issued and 44,755,615 shares outstanding as of June 30, 2018; 120 million shares authorized, 53,612,340 shares issued and 45,152,299 shares outstanding as of December 31, 2017)	$	—		$	—
Additional paid-in capital	239,745			235,659
Retained earnings	199,683			122,686
Accumulated other comprehensive loss	(21,353		)	(15,670		)
Treasury stock, at cost (9,568,325 shares at June 30, 2018 and 8,460,041 at December 31, 2017)	(65,274		)	(56,927		)
Total shareholders’ equity	352,801			285,748
Total liabilities and shareholders’ equity	$	1,474,517		$	1,448,647

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

GAIN CAPITAL HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
REVENUE:
Retail revenue	$	72,032		$	79,079		$	156,152		$	118,010
Futures revenue	11,129			9,565			21,774			20,145
Other (loss)/revenue	(1,411		)	822			484			1,833
Total non-interest revenue	81,750			89,466			178,410			139,988
Interest revenue	2,827			1,261			4,901			2,082
Interest expense	392			136			766			299
Total net interest revenue	2,435			1,125			4,135			1,783
Net revenue	$	84,185		$	90,591		$	182,545		$	141,771
EXPENSES:
Employee compensation and benefits	$	22,473		$	23,011		$	46,811		$	43,534
Selling and marketing	6,767			7,517			12,737			16,752
Referral fees	10,464			13,312			21,895			29,753
Trading expenses	5,541			4,863			11,352			10,334
General and administrative	14,228			11,835			26,692			21,064
Depreciation and amortization	5,341			4,121			10,709			7,949
Purchased intangible amortization	3,612			3,817			7,280			6,883
Communications and technology	5,495			4,497			10,886			9,526
Bad debt provision	282			(166		)	1,400			(94		)
Restructuring expenses	25			—			25			—
Impairment of investment	—			—			(130		)	—
Total operating expense	74,228			72,807			149,657			145,701
OPERATING PROFIT/(LOSS)	9,957			17,784			32,888			(3,930		)
Interest expense on long term borrowings	3,388			2,694			6,728			5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE/(BENEFIT)	6,569			15,090			26,160			(9,289		)
Income tax (benefit)/expense	(263		)	1,533			7,413			(4,401		)
Equity in net loss of affiliate	—			(34		)	—			(54		)
Net income/(loss) from continuing operations	6,832			13,523			18,747			(4,942		)
Income from discontinued operations, including gain on sale of $69,581, net of income tax of $9,806	60,642			569			64,988			248
NET INCOME/(LOSS)	67,474			14,092			83,735			(4,694		)
Less income attributable to non-controlling interest	326			153			501			238
NET INCOME/(LOSS) APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.	67,148			13,939			83,234			(4,932		)
Other comprehensive income:
Foreign currency translation adjustment	(15,157		)	7,761			(5,683		)	12,300
COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.	$	51,991		$	21,700		$	77,551		$	7,368
Earnings/(loss) per common share:
Basic earnings/(loss) from continuing operations	$	0.13		$	0.30		$	0.39		$	(0.09	)
Basic earnings from discontinued operations	$	1.36		$	0.01		$	1.45		$	0.01
Basic	$	1.49		$	0.31		$	1.84		$	(0.08	)
Diluted earnings/(loss) from continuing operations	$	0.13		$	0.30		$	0.38		$	(0.09	)
Diluted earnings from discontinued operations	$	1.34		$	0.01		$	1.43		$	0.01
Diluted	$	1.47		$	0.31		$	1.81		$	(0.08	)
Weighted average common shares outstanding used in computing earnings/(loss) per common share:

5

Basic	44,797,103	47,687,214	44,906,800	47,790,307
Diluted	45,309,002	47,894,648	45,415,774	47,790,307

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

GAIN CAPITAL HOLDINGS, INC.

Condensed Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited)

(in thousands, except share data)

	Common Stock				Treasury Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
	Outstanding Shares		Amount
BALANCE—December 31, 2017	45,152,299		$	—	$	(56,927	)	$	235,659	$	122,686		$	(15,670	)	$	285,748
Net income applicable to Gain Capital Holdings, Inc.	—		—		—			—		83,234			—			83,234
Exercise of options	84,500		—		—			587		—			—			587
Conversion of restricted stock into common stock	585,565		—		—			—		—			—			—
Issuance of common stock for the employee stock purchase plan	41,535		—		—			314		—			—			314
Purchase of treasury stock	(1,098,880	)	—		(8,271		)	—		—			—			(8,271		)
Shares withheld for net settlements of share-based awards	(9,404	)	—		(76		)	—		—			—			(76		)
Share-based compensation	—		—		—			3,185		—			—			3,185
Adjustment to fair value of redeemable non-controlling interests	—		—		—			—		(890		)	—			(890		)
Dividends declared	—		—		—			—		(5,347		)	—			(5,347		)
Foreign currency translation adjustment	—		—		—			—		—			(5,683		)	(5,683		)
BALANCE—June 30, 2018	44,755,615		$	—	$	(65,274	)	$	239,745	$	199,683		$	(21,353	)	$	352,801

	Common Stock				Treasury Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total
	Outstanding Shares		Amount
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.	—		—		—			—		(4,932		)	—			(4,932		)
Exercise of options	82,774		—		—			335		—			—			335
Conversion of restricted stock into common stock	510,793															—
Issuance of common stock for the employee stock purchase plan	64,546							402								402
Purchase of treasury stock	(1,373,685	)	—		(9,426		)	—		—			—			(9,426		)
Shares withheld for net settlements of share-based awards	(55,190	)	—		(381		)	—		—			—			(381		)
Share-based compensation	—		—		—			2,856		—			—			2,856
Adjustment to fair value of redeemable non-controlling interests	—		—		—			—		983			—			983
Dividends declared	—		—		—			—		(5,774		)	—			(5,774		)
Foreign currency translation adjustment	—		—		—			—		—			12,300			12,300
BALANCE—June 30, 2017	47,449,481		$	—	$	(40,574	)	$	221,985	$	133,676		$	(24,542	)	$	290,545

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

GAIN CAPITAL HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Six Months Ended June 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$	83,735		$	(4,694	)
Adjustments to reconcile net income/(loss) to cash (used in)/provided by operating activities
Loss/(gain) on foreign currency exchange rates	950			(96		)
Depreciation and amortization	19,271			16,315
Deferred tax (benefit)/expense	(1,227		)	622
Amortization of deferred financing costs	324			221
Bad debt provision/(recovery)	1,400			(94		)
Convertible senior notes discount amortization	2,743			2,289
Share-based compensation	3,185			2,856
Equity in net loss of affiliate	—			54
Gain on sale of GTX	(69,581		)	—
Changes in operating assets and liabilities:
Receivables from brokers	25,687			(20,037		)
Other assets	3,055			518
Payables to customers	(67,826		)	(20,183		)
Payables to brokers	192			—
Accrued compensation and benefits	(2,056		)	(4,891		)
Accrued expenses and other liabilities	2,822			(6,176		)
Income tax payable	9,345			(2,699		)
Net cash provided by/(used in) operating activities	12,019			(35,995		)
Cash provided by/(used in) operating activities - continuing operations	8,233			(24,521		)
Cash provided by/(used in) operating activities - discontinued operations	3,786			(11,474		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(8,736		)	(10,182		)
Proceeds from sale of GTX	96,764			—
Acquisition of FXCM assets	—			(6,960		)
Net cash provided by/(used in) investing activities	88,028			(17,142		)
Cash used in investing activities - continuing operations	(7,891		)	(16,806		)
Cash provided by/(used in) investing activities - discontinued operations	95,919			(336		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	587			335
Proceeds from employee stock purchase plan	314			402
Purchase of treasury stock	(8,347		)	(9,807		)
Dividend payments	(5,347		)	(5,774		)
Distributions to non-controlling interest holders	(199		)	(873		)
Net cash used in financing activities	(12,992		)	(15,717		)
Effect of exchange rate changes on cash and cash equivalents	5,107			29,091
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	92,162			(39,763		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	1,188,516			1,180,228
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	1,280,678		$	1,140,465
Cash and cash equivalents	360,312			193,137
Cash and cash equivalents held for customers	920,366			947,328
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	1,280,678		$	1,140,465

8

SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	(4,346	)	$	(3,148	)
Income taxes	$	(3,040	)	$	(4,386	)
Non-cash financing activities:
Adjustment to redemption value of non-controlling interests	$	(890	)	$	983

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9

GAIN CAPITAL HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

GAIN Capital Holdings, Inc. (together with its subsidiaries, the “Company”), is a Delaware corporation formed and incorporated on March 24, 2006. GAIN Holdings, LLC is a wholly-owned subsidiary of GAIN Capital Holdings, Inc., and owns all outstanding membership units of GAIN Capital Group, LLC (“Group, LLC”), the Company’s primary regulated entity in the United States. GAIN Capital Holdings Ltd. is the holding company of the Company’s primary regulated entity in the United Kingdom.

The Company is a global provider of trading services and solutions, specializing in over-the-counter, or OTC, and exchange-traded markets. The Company operates its business in two segments. Through its retail segment, the Company provides its retail customers around the world with access to a diverse range of global financial markets, including spot forex, precious metals, as well as spread bets and contracts for difference, or CFDs, on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products, as well as OTC options. The Company’s futures segment offers execution and risk management services for exchange-traded products on major U.S. and European exchanges, including Bitcoin. For more information about the Company’s segments, please see Note 19.

Group, LLC is a retail foreign exchange dealer (“RFED”) and a Futures Commission Merchant (“FCM”) registered with the Commodity Futures Trading Commission (the “CFTC”). As such, it is subject to the regulations of the CFTC, an agency of the U.S. government, and the rules of the National Futures Association (“NFA”), an industry self-regulatory organization.

GAIN Capital UK Limited ("GCUK") is registered in the United Kingdom (“U.K.”) and regulated by the Financial Conduct Authority (“FCA”) as a full scope €730k IFPRU Investment Firm.

Sale of GTX ECN Business

On June 29, 2018, the Company completed the sale of the GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse Group via its FX unit, 360T, for a total purchase price of $100 million subject to a customary working capital adjustment. The Company determined that the institutional segment met the discontinued operations criteria set forth in Accounting Standards Codification (ASC) Subtopic 205-20-45, Presentation of Financial Statements, in the quarter ended June 30, 2018. As such, the institutional segment results have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For more information relating to the discontinued operations of the Company's GTX ECN business, please see Note 3.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements for the interim periods. The financial statements are presented in accordance with accounting principles generally accepted in the United States of America. The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the Securities and Exchange Commission's ("SEC") regulations for interim financial statements, and, in accordance with SEC rules, omit or condense certain information and footnote disclosures. Results for the interim periods are not necessarily indicative of results to be expected for any other interim period or for the full year. These financial statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, after the elimination of inter-company transactions and balances.

2. ACCOUNTING PRONOUNCEMENTS

Recently Adopted

In January 2017, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2) from the goodwill impairment test. Instead, an impairment charge will equal the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the

10

amount of goodwill allocated to the reporting unit. The guidance will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted after January 1, 2017. The Company has adopted this ASU as of January 1, 2018, and will apply Step 2 going forward to the extent it is required.

In November 2016, the FASB issued ASU No. 2016-18, “Restricted Cash,” which requires that companies present cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents (restricted cash) when reconciling beginning-of-period and end-of-period totals on the Statement of Cash Flows. The Company has retrospectively adopted this ASU as of January 1, 2018 and includes cash and cash equivalents held for customers as restricted cash. As a result, Net cash used in operating activities on the Statement of Cash Flows increased by $20.2 million for the six months ended June 30, 2017.

The Company defines restricted cash to include cash and cash equivalents held for customers, which represents cash and other highly liquid assets held to fund customer liabilities in connection with trading positions. Included in this balance are funds deposited by customers and funds accruing to customers as a result of trades or contracts. The Company records a corresponding liability in connection with this amount in Payables to customers. In addition, the Company holds certain customer funds in segregated or secured broker accounts. Legally segregated balances are not available for general use, in accordance with certain jurisdictional regulatory requirements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of revenue falls under ASC Topic 825, Financial Instruments, which is excluded from the scope of the new guidance. The Company adopted ASU No. 2014-09 using the modified retrospective approach. See Note 4 Revenue Recognition for additional disclosure.

Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220),” to address certain income tax effects in Accumulated Other Comprehensive Income (AOCI) resulting from the tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within AOCI to retained earnings in the period in which the effect of the tax reform is recorded. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods. Early adoption is permitted. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

3. DISCONTINUED OPERATIONS

On June 29, 2018, the Company completed the sale of its GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse via its FX unit, 360T, for a total purchase price of $100 million, subject to a customary working capital adjustment.

The Company recorded a gain of $69.6 million on the sale of the GTX business subject to the final working capital adjustment between the parties.

The Company determined that the sale of the GTX business qualifies as a discontinued operation under the criteria set forth in Accounting Standards Codification 205-20-45, Presentation of Financial Statements and the Company does not have any significant continuing involvement in these operations.

The results of operations from the discontinued segment for the three and six months endedJune 30, 2018 are as follows (in thousands):

11

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
REVENUE:
Institutional revenue	$	7,923		$	7,435		$	16,379		$	15,802
Other revenue	(2		)	—			(2		)	—
Total non-interest revenue	7,921			7,435			16,377			15,802
Interest revenue	55			28			103			48
Total net interest revenue	55			28			103			48
Net revenue	$	7,976		$	7,463		$	16,480		$	15,850
EXPENSES:
Employee compensation and benefits	$	2,466		$	3,314		$	5,879		$	7,006
Trading expenses	2,782			2,315			5,439			4,911
Other expenses	1,861			1,804			3,924			3,183
Total operating expense	7,109			7,433			15,242			15,100
OPERATING PROFIT	867			30			1,238			750
Gain on sale of discontinued operations	69,581			—			69,581			—
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)	70,448			30			70,819			750
Income tax expense/(benefit)	9,806			(539		)	5,831			502
NET INCOME FROM DISCONTINUED OPERATIONS	$	60,642		$	569		$	64,988		$	248

Since the sale of the GTX ECN business closed on June 29, 2018, there are no assets held for sale as of June 30, 2018. As of December 31, 2017, total assets of $28.5 million and total liabilities of $3.8 million were related to the discontinued segment.

4. REVENUE RECOGNITION

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of the Company's retail revenue as well as interest revenue falls under ASC Topic 825, “Financial Instruments”, which is excluded from the scope of Topic 606. Additionally, the Company’s futures segment revenue was not materially impacted as the satisfaction of performance obligations under the new guidance is materially consistent with the Company’s previous revenue recognition policies. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis.

Similarly, the amended guidance did not have a material impact on the recognition of costs incurred to obtain new contracts. As a result of the adoption of the new guidance, the Company recorded a gross up of $0.5 million and $1.0 million for the three and six months ended June 30, 2018, respectively, which impacted referral fee expense in the Company's discontinued operations. The Company adopted ASU No. 2014-09 using the modified retrospective approach.

Under ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to customers in exchange for an amount that reflects the consideration the Company expects to be entitled to in transferring those goods or services. The following is a description of the Company’s revenue recognition policies as they relate to revenue from contracts with customers.

Futures Revenue

Futures revenue comprises primarily commissions earned on futures and futures options trades. We act as an agent for the trades executed in our futures segment and are not exposed to market risk in connection with that activity. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s futures revenue performance obligations also consist of trade execution and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date.

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Disaggregation of Revenues

The following table presents the Company’s revenue from contracts with customers disaggregated by the services described above for the futures segment for the three and six months ended June 30, 2018:

	Three months ended June 30, 2018		Six months ended June 30, 2018
Futures
Direct Customers (1)	$	2,693	$	5,166
Indirect Customers (2)	$	6,555	$	13,583
Other	$	2,852	$	4,842
Total Segment Revenue	$	12,100	$	23,591

(1) Direct customers are all customers not classified as indirect

(2) Indirect customers are referred to the Company by introducing brokers

Contract Assets and Contract Liabilities

The timing of revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received, prior to the time at which the service obligation is satisfied.

5. FAIR VALUE INFORMATION

Fair value is defined as the price that would be received in exchange for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. Generally Accepted Accounting Principles ("US GAAP") establishes a three level hierarchy that ranks the quality and reliability of information used in developing fair value estimates for financial instruments. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of fair value hierarchy are summarized below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 - Valuations that require inputs that are both unobservable to a market participant and significant to the fair value measurement.

For assets and liabilities that are transferred between levels during the period, fair values are ascribed as if the assets or liabilities had been transferred as of the beginning of the period.

The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis during the reporting period and the related hierarchy levels (amounts in thousands):

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	Fair Value Measurements on a Recurring Basis as of June 30, 2018
	Level 1		Level 2			Level 3		Total
Financial Assets/(Liabilities):
Cash and cash equivalents:
Money market accounts	$	252,311	$	—		$	—	$	252,311
Cash and cash equivalents held for customers:
US treasury bills: U.S. government and agency securities	103,891		—			—		103,891
Receivable from brokers:
Broker derivative contracts	—		(10,391		)	—		(10,391		)
Other assets:
Certificates of deposit	176		—			—		176
Other	125		—			—		125
Payables to customers:
Customer derivative contracts	—		124,807			—		124,807
Payables to brokers:
Broker derivative contracts	—		2,482			—		2,482
Total	$	356,503	$	116,898		$	—	$	473,401

	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 cash equivalents 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

The Company has not changed its valuation approaches or techniques in measuring the fair value of any financial assets and liabilities during the six months ended June 30, 2018, nor has there been any movement between levels during the period.

Level 1 Financial Assets

The Company has U.S. Treasury bills, money market accounts and certificates of deposit that are Level 1 financial instruments that are recorded based upon listed or quoted market rates. The U.S. Treasury bills and money market accounts are recorded in Cash and cash equivalents and Cash and cash equivalents held for customers and the certificates of deposit are recorded in Other Assets.

Level 2 Financial Assets and Liabilities

The Company has customer derivative contracts that are Level 2 financial instruments recorded in Payables to customers.

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The Company has broker derivative contracts that are Level 2 financial instruments recorded in Receivables from brokers and Payables to brokers.

The fair values of these Level 2 financial instruments are based upon directly observable values for underlying instruments.

Level 3 Financial Liabilities

The Company did not have any Level 3 Financial Assets or Liabilities on June 30, 2018 or December 31, 2017.

Financial Instruments Not Measured at Fair Value

The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value in the condensed consolidated balance sheets (amounts in thousands).

Receivables from brokers comprise open trades, which are measured at fair value (disclosed above), and the Company’s posted funds with brokers that are required as collateral for holding trading positions, which are not measured at fair value but approximate fair value. These deposits approximate fair value because they are cash balances that the Company may withdraw at its discretion. Settlement would be expected to occur within a relatively short period of time once a withdrawal is initiated.

Payables to customers comprise open trades, which are measured at fair value (disclosed above), and customer deposits that the Company holds for its role as clearing broker. These deposits are not measured at fair value, but approximate fair value, because they are cash balances that the Company or its customers can settle at either party’s discretion. Such settlement would occur within a relatively short period of time once a withdrawal is initiated.

Payables to brokers comprise open trades, which are measured at fair value (disclosed above) and cash due to brokers. The cash within this balance is not measured at fair value but does approximate fair value, because it is immediately payable to the brokers. Settlement with brokers generally occurs either on the same or next business day following a margin call.

The carrying value of Convertible senior notes represents the notes’ principal amounts net of unamortized discount (refer to Note 14). The Company assessed the notes’ fair value as determined by current Company-specific and risk free interest rates as of the balance sheet date.

	As of June 30, 2018				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	$	62,726	$	62,726	$	—	$	62,726	$	—
Financial Liabilities:
Payables to customers	$	1,045,173	$	1,045,173	$	—	$	1,045,173	$	—
Payable to brokers	$	5,455	$	5,455	$	—	$	5,455	$	—
Convertible senior notes	$	135,289	$	179,847	$	—	$	179,847	$	—

	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:

15

Payables to customers	$	1,108,794	$	1,108,794	$	—	$	1,108,794	$	—
Convertible senior notes	$	132,221	$	205,073	$	—	$	205,073	$	—

6. DERIVATIVES

The Company’s contracts with its customers and its liquidity providers are deemed to be derivative instruments. The table below represents the fair values of the Company’s derivative instruments reported within Receivables from brokers, Payables to customers and Payables to brokers on the accompanying Condensed Consolidated Balance Sheets (amounts in thousands):

	June 30, 2018
	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	$	105,405		$	(23,079	)	$	82,326
CFD contracts	91,411			(60,328		)	31,083
Metals contracts	6,363			(2,874		)	3,489
Total	$	203,179		$	(86,281	)	$	116,898
	June 30, 2018
	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	$	62,726		$	(10,391	)	$	52,335
Payables to customers	$	(1,045,173	)	$	124,807		$	(920,366	)
Payable to brokers	$	(5,455	)	$	2,482		$	(2,973	)

	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):

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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	)

The Company’s derivatives include different underlyings which vary in price. Foreign exchange contracts typically have prices less than two dollars, while certain metals contracts and CFDs can have considerably higher prices. The amounts reported within Receivables from brokers, Payables to customers, and Payables to brokers on the Consolidated Balance Sheets are derived from the number of contracts below (amounts in thousands):

	June 30, 2018
	Total contracts in long positions	Total contracts in short positions
Derivative Instruments:
Foreign currency exchange contracts	3,019,520	3,598,235
CFD contracts	115,947	168,033
Metals contracts	485	120
Total	3,135,952	3,766,388

	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

The Company did not designate any of its derivatives as hedging instruments. Net gains with respect to derivative instruments reflected in Retail revenue in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months endedJune 30, 2018 and June 30, 2017 were as follows (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Derivative Instruments:
Foreign currency exchange contracts	$	51,579	$	43,633	$	92,830	$	61,009
CFD contracts	14,681		26,422		51,828		53,213
Metals contracts	5,759		9,018		11,481		3,782
Total	$	72,019	$	79,073	$	156,139	$	118,004

7. RECEIVABLES FROM BROKERS

The Company has posted funds with brokers as collateral required by agreements for holding trading positions. These amounts are reflected as Receivables from brokers on the Condensed Consolidated Balance Sheets.

Amounts receivable from brokers consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Required collateral	$	62,726		$	73,537
Open foreign exchange positions	(10,391		)	4,966
Total	$	52,335		$	78,503

8. PROPERTY AND EQUIPMENT

Property and equipment, including leasehold improvements and capitalized software development costs, consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Software	$	59,713		$	57,047
Computer equipment	18,964			18,390
Leasehold improvements	10,963			11,068
Telephone equipment	642			643
Office equipment	2,048			2,110
Furniture and fixtures	3,544			3,592
Web site development costs	635			386
Gross property and equipment	96,509			93,236
Less: Accumulated depreciation and amortization	(60,047		)	(52,494		)
Property and equipment, net	$	36,462		$	40,742

Depreciation and amortization expense for property and equipment was $5.3 million and $4.1 million for the three months ended June 30, 2018 and 2017, respectively, and $10.7 million and $7.9 million for the six months ended June 30, 2018 and 2017, respectively.

9. INTANGIBLE ASSETS

The Company’s various intangible assets consisted of the following as of (amounts in thousands):

	June 30, 2018							December 31, 2017
Intangibles	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Customer lists	$	59,658	$	(36,210	)	$	23,448	$	60,420	$	(31,698	)	$	28,722
Technology	50,233		(37,273		)	12,960		72,204		(43,270		)	28,934
Trademarks	7,533		(4,187		)	3,346		7,680		(3,730		)	3,950
Total finite lived intangibles	117,424		(77,670		)	39,754		140,304		(78,698		)	61,606
Trademark not subject to amortization (1)	363		—			363		363		—			363
Total intangibles	$	117,787	$	(77,670	)	$	40,117	$	140,667	$	(78,698	)	$	61,969

(1) These indefinite-life trademarks relate to the Forex.com and foreignexchange.com domain names where management determined there was no legal, regulatory or technological limitation on their useful lives. The Company compares the recorded value of the indefinite-life intangible assets to their fair value on an annual basis and whenever circumstances arise that indicate that impairment may have occurred.

The Company had the following identifiable intangible assets and weighted average amortization periods as of June 30, 2018:

Intangible Assets	Amount (in thousands)		Weighted average amortization period
Customer lists	$	59,658	6.9 years
Technology	50,233		8.6 years
Trademarks (1)	7,896		6.7 years
Total intangible assets	$	117,787

(1) Trademarks with an indefinite-life, as described above, comprise $0.4 million of the $7.9 million of trademarks.

Amortization expense for the purchased intangibles was $3.6 million and $3.8 million for the three months ended June 30, 2018 and 2017, respectively, and $7.3 million and $6.9 million for the six months ended June 30, 2018 and 2017, respectively.

On February 7, 2017, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Forex Capital Markets L.L.C. (“FXCM”). Pursuant to the terms of the Purchase Agreement, FXCM transferred substantially all of its U.S.-

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domiciled customer accounts to the Company effective as of February 24, 2017. The Company paid $7.2 million to FXCM as consideration for the purchased accounts for the full year 2017, which was capitalized and included as an intangible asset and amortized on a straight line basis over its two year useful life.

Goodwill

Goodwill is evaluated for impairment on an annual basis on October 31 and in interim periods when events or changes indicate the carrying value may not be recoverable. As a result of the sale of the GTX ECN business, the Company tested the institutional goodwill for impairment using data as of June 30, 2018 and concluded there was no impairment. The $4.6 million of institutional goodwill was allocated to discontinued operations.

The Company operates under two reporting units: retail and futures. There were no additions or impairments to the carrying value of the Company’s goodwill during the six months ended June 30, 2018.

For the year ended December 31, 2017, the Company performed a qualitative analysis to determine whether it was more likely than not that the fair value of its reporting units was less than their carrying value. As a result of this assessment, the Company determined that it was not necessary to perform a quantitative impairment test and concluded that goodwill assigned to each of its reporting units was not impaired at December 31, 2017.

As of June 30, 2018 and December 31, 2017, the Company had recorded goodwill of approximately $28.2 million and $33.0 million, respectively. The decrease of $4.8 million was primarily related to the discontinued operations of GTX.

The following represents the changes in the carrying amount of goodwill by segment (amounts in thousands):

	Retail			Institutional			Futures			Total
Carrying amount of goodwill as of December 31, 2017	$	25,952		$	4,650		$	2,434		$	33,036
Foreign currency translation adjustments	(186		)	(34		)	(18		)	(238		)
Discontinued operations	—			(4,616		)	—			(4,616		)
Carrying amount of goodwill as of June 30, 2018	$	25,766		$	—		$	2,416		$	28,182

10. OTHER ASSETS

Other assets consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Vendor and security deposits	$	6,932		$	11,923
Income tax receivable	282			2,132
Deferred tax assets, net	12,053			10,698
GTX trade receivables	616			5,758
Customer debit positions	4,067			2,384
Allowance on customer debit positions	(3,700		)	(1,959		)
Prepaid assets	8,801			9,523
Miscellaneous receivables	7,248			4,872
Deferred commitment fees	444			550
Total other assets	$	36,743		$	45,881

11. RELATED PARTY TRANSACTIONS

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Certain officers and directors of the Company have personal funds on deposit in separate customer accounts with the Company. These accounts are recorded in Payables to customers on the Condensed Consolidated Balance Sheets. The aggregate amount of these funds was $0.2 million and $0.2 million at June 30, 2018 and December 31, 2017, respectively.

IPGL Limited, the majority selling shareholder in the acquisition of City Index, has a trading account with the Company which is recorded in Payables to customers on the Condensed Consolidated Balance Sheets. The aggregate amount of these funds was $20.2 million and $15.9 million as of June 30, 2018 and December 31, 2017, respectively. The net revenue generated by any individual related party was not deemed to be material in any period.

12. NON-CONTROLLING INTERESTS

Non-controlling interests

In March 2014, the Company acquired controlling interests in Global Asset Advisors (“GAA”) and Top Third (“TT”). The Company purchased 55% of each entity, and the respective sellers maintained a 45% interest in each entity, subject to immediately exercisable call options for the Company to purchase the remaining interests, as well as put options for the sellers to sell their remaining interests in each entity to the Company that were to become exercisable in 2017. In December 2016, the Company acquired an additional 24% of each entity and, accordingly, the respective sellers now maintain a 21% interest in each entity. In connection with the purchase of these additional interests, the Company and the respective sellers agreed that neither would exercise the call options or put options with respect to the remaining interests prior to December 31, 2017. In December 2017, the Company and the sellers of TT extended their agreement that neither would exercise the relevant call options or put options through December 31, 2018.

In February 2018, the minority owners of GAA notified the Company that they were exercising their put option with respect to their combined 21% ownership of GAA. The purchase of the ownership interests subject to the put option had not settled as of June 30, 2018. However, because of the issuance of the exercise notice, the related non-controlling interest in GAA was reclassified as a liability. The purchase of the minority ownership interests is expected to close in the third quarter of 2018.

In accordance with ASC 480-10-S99-3A, Classification and Measurement of Redeemable Securities, non-controlling interests are classified outside of permanent equity as their redemption is not (i) mandatory, (ii) at fixed prices, and (iii) exclusively within the Company’s control.

The non-controlling interest related to TT is not classified as a liability, because redemption is not mandatory or at a fixed price. It is not classified as equity because the redemption is not exclusively in the Company’s control. Therefore, the non-controlling interest is held in temporary equity in the Condensed Consolidated Balance Sheets.

The non-controlling interests’ carrying value is determined by the Company’s purchase prices and the non-controlling interests’ share of the Company’s subsequent net income. This value is benchmarked against the redemption value of the sellers’ put options. The carrying value is adjusted to the latter, provided that it does not fall below the initial carrying values, as determined by the Company’s purchase price allocation. The Company reflects any changes caused by such an adjustment in retained earnings, rather than in current earnings.

The table below reflects the non-controlling interests’ effects on the Company’s financial statements (amounts in thousands):

	Redeemable non-controlling interests
January 1, 2018	$	4,411
Adjustment to the redemption value of non-controlling interests	890
Net income attributable to non-controlling interests	371
Distributions to non-controlling interest holders	(199		)
Reclassification to liabilities	(2,911		)
June 30, 2018	$	2,562

13. REVOLVING CREDIT ARRANGEMENT

On August 3, 2017, the Company entered into a Credit Agreement, dated as of August 2, 2017, for a three year U.S. $50.0 million senior secured first lien revolving credit facility that matures in August 2020. Upon request of the Company, the credit facility may be increased by up to $25.0 million, with a minimum increase of $5.0 million. The credit facility contains covenants that are customary for an issuer with senior debt. The commitment fees of $0.4 million is amortized over the life of the facility and is recorded to Other Assets. As of June 30, 2018, the Company was in compliance with the covenants for its credit facility.

As of June 30, 2018, there were no amounts outstanding under the revolving line of credit.

14. CONVERTIBLE SENIOR NOTES

Convertible Senior Notes due 2022

On August 22, 2017, the Company issued $92.0 million aggregate principal amount of its 5.00% Convertible Senior Notes due 2022, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Notes bear interest at a fixed rate of 5.00% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election. The Company currently intends to settle the debt in cash. The Notes will mature on August 15, 2022, unless earlier converted, redeemed or repurchased. The Company may not redeem the Notes prior to August 15, 2020. The net proceeds from the offering were approximately $89.0 million, after deducting discounts to the initial purchasers but prior to other offering expenses payable by the Company.

Convertible Senior Notes due 2020

On April 1, 2015, as part of the City Index acquisition consideration, the Company issued to the sellers $60.0 million aggregate principal amount of 4.125% Convertible Senior Notes maturing on April 1, 2020. These Convertible Senior Notes pay interest semi-annually on April 1 and October 1 at a rate of 4.125% per year, which commenced on October 1, 2015. The Company currently intends to settle the debt in cash.

Convertible Senior Notes due 2018

On November27, 2013, the Company issued $80.0 million principal amount of 4.125% Convertible Senior Notes due December 1, 2018. The Company received net proceeds of $77.9 million, after deducting the initial purchasers' discount. These Convertible Senior Notes pay interest semi-annually on June 1 and December 1 at a rate of 4.125% per year, which commenced on June 1, 2014. During the first quarter of 2016, the Company repurchased $1.9 million in principal amount of the convertible senior notes due 2018, for an aggregate purchase price of $1.7 million. During the third quarter of 2017, the Company repurchased $71.8 million in principal amount of the convertible senior notes due 2018, for an aggregate purchase price of $73.7 million with the proceeds from the issuance of Convertible Senior Notes due 2022. As a result, the Company recognized an extinguishment loss of $4.9 million. The Company currently intends to settle the remaining outstanding debt in cash upon maturity.

Under accounting guidance, an entity must separately account for the liability and equity components of a convertible debt instrument that may be settled entirely or partially in cash upon conversion. The separate accounting must reflect the issuer’s economic interest cost.

The balances of the liability and equity components as of June 30, 2018 and December 31, 2017 were as follows (amounts in thousands):

	June 30, 2018			December 31, 2017
Liability component - principal	$	158,350		$	158,350
Deferred bond discount	(22,615		)	(25,624		)
Deferred financing cost	(446		)	(505		)
Liability component - net carrying value	$	135,289		$	132,221
Additional paid in capital	$	39,405		$	39,405
Discount attributable to equity	(826		)	(826		)
Equity component	$	38,579		$	38,579

Interest expense related to the Convertible Senior Notes, included in Interest Expense on long term borrowings in the Condensed Consolidated Statements of Operations and Comprehensive Income, was as follows (amounts in thousands):

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	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Interest expense - stated coupon rate	$	1,834	$	1,425	$	3,668	$	2,850
Interest expense - amortization of deferred bond discount and costs	1,554		1,269		3,060		2,509
Total interest expense - convertible senior notes	$	3,388	$	2,694	$	6,728	$	5,359

15. EARNINGS/(LOSS) PER COMMON SHARE

Basic and diluted earnings/(loss) per common share are computed by dividing net income/(loss) by the weighted average number of common shares outstanding during the period. Diluted earnings/(loss) per share includes the determinants of basic net income per share and, in addition, gives effect to the potential dilution that would occur if securities or other contracts to issue common stock were exercised, vested or converted into common stock, unless they are anti-dilutive. Diluted weighted average common shares include vested and unvested stock options, unvested restricted stock units and unvested restricted stock awards. Approximately 0.3 million and 0.4 million stock options were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2018, respectively, as they were anti-dilutive. Approximately 0.2 million and 0.3 million stock options were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2017, respectively, as they were anti-dilutive.

Diluted earnings (loss) per share excludes any shares of Company common stock potentially issuable under the Company’s convertible senior notes, which are discussed in Note 14. Based upon an assumed trading price of $13 for each share of the Company’s common stock, and if the relevant conditions under the indenture governing the 2018, 2020, and 2022 convertible senior notes were satisfied, there would be no additional dilutive shares for the 2018 note and an additional 1.5 million and 4.2 million dilutive shares as of June 30, 2018, for the 2020 and 2022 notes, respectively.

The following table sets forth the computation of earnings/(loss) per share (amounts in thousands except share and per share data):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2018			2017		2018			2017
Net income/(loss) from continuing operations	$	6,506		$	13,370	$	18,246		$	(5,180	)
Adjustment (1)	(523		)	915		(890		)	983
Net income/(loss) available to GAIN common shareholders from continuing operations	$	5,983		$	14,285	$	17,356		$	(4,197	)
Net income from discontinued operations	60,642			569		64,988			248
Weighted average common shares outstanding:
Basic weighted average common shares outstanding	44,797,103			47,687,214		44,906,800			47,790,307
Effect of dilutive securities:
Stock options	276,899			207,434		269,316			267,880
RSUs/RSAs	235,000			—		239,658			6,923
Diluted weighted average common shares outstanding	45,309,002			47,894,648		45,415,774			47,790,307
Basic earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.39		$	(0.09	)
Basic earnings from discontinued operations	$	1.36		$	0.01	$	1.45		$	0.01
Diluted earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.38		$	(0.09	)
Diluted earnings from discontinued operations	$	1.34		$	0.01	$	1.43		$	0.01

(1) During the three and six months ended June 30, 2018 and 2017, the Company concluded that the carrying value of the Company's redeemable noncontrolling interests was less than their redemption value, requiring that an adjustment to the

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carrying value be recorded for purposes of calculating earnings/(loss) per common share. The adjustment to increase or reduce the carrying value will, respectively, reduce or increase earnings/(loss) per common share by reducing or increasing net income available to common shareholders.

16. COMMITMENT AND CONTINGENCIES

From time to time the Company becomes involved in legal proceedings and in each case the Company assesses the likely liability and/or the amount of damages as appropriate. Where available information indicates that it is probable a liability had been incurred at the date of the Condensed Consolidated Financial Statements and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to income. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings, the Company can estimate possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued. For certain other legal proceedings, the Company cannot reasonably estimate such losses, if any, since the Company cannot predict if, how or when such proceedings will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues must be developed, including the need to discover and determine important factual matters and the need to address novel or unsettled legal questions relevant to the proceedings in question, before a loss or additional loss or range of loss can be reasonably estimated for any proceeding.

17. INCOME TAXES

The Company's (benefit)/provision for income taxes was approximately $(0.3) million and $7.4 million for the three and six months ended June 30, 2018 and a provision/(benefit) of approximately $1.5 million and $(4.4) million for the three and six months ended June 30, 2017. These amounts reflect the Company's estimate of the annual effective tax rates of (4.0)% and 10.2%, adjusted for certain discrete items, for the three months ended June 30, 2018 and 2017, respectively. The Company's effective tax rates of 28.3% and 47.4% for the six months ended June 30, 2018 and 2017, respectively, reflect the Company's estimate of the annual effective tax rate adjusted for certain discrete items, primarily changes in uncertain tax positions. Changes in the Company's effective tax rate arise primarily from changes in the geographic mix of revenues and expenses, as well as changes to statutory tax rates.

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Certain net deferred tax assets of the Company are included in Other assets on the Condensed Consolidated Balance Sheets.

18. REGULATORY REQUIREMENTS

The following table illustrates the minimum regulatory capital our subsidiaries were required to maintain as of June 30, 2018 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	$	35.8	$	48.8	$	13.0	136	%
GAIN Capital Securities, Inc.	0.1		0.4		0.3		400	%
GAIN Capital U.K., Ltd.	66.4		201.2		134.8		303	%
GAIN Capital Japan Co., Ltd.	1.6		9.5		7.9		594	%
GAIN Capital Australia, Pty. Ltd.	0.7		5.4		4.7		771	%
GAIN Capital-Forex.com Hong Kong, Ltd.	1.9		3.4		1.5		179	%
GAIN Global Markets, Inc.	0.4		2.0		1.6		500	%
GAIN Capital-Forex.com Canada, Ltd.	0.2		1.4		1.2		700	%
GAIN Capital Singapore Pte., Ltd.	0.3		7.4		7.1		2,467	%

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Trade Facts, Ltd.	0.6		3.5		2.9		583	%
Global Asset Advisors, LLC	—		1.4		1.4		100	%
GAIN Capital Payments Ltd.	0.1		0.4		0.3		400	%
GTX SEF, LLC	0.8		1.0		0.2		125	%
Total	$	108.9	$	285.8	$	176.9	262	%

19. SEGMENT INFORMATION

ASC Topic 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise which engage in business activities from which they may earn revenues and incur expenses and about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision making group, in deciding how to allocate resources and in assessing performance. Reportable segments are defined as an operating segment that either (a) exceeds 10% of revenue, or (b) the reported profit or loss in absolute amount of which exceeds 10% of profit of all operating segments that did not report a loss or (c) exceeds 10% of the combined assets of all operating segments. The Company’s operations relate to global trading services and solutions.

During the first quarter of 2018, the Company completed its implementation of global support groups in the areas of finance, legal, human resources, and treasury. These groups are now centrally managed and support all business functions. Therefore, all costs related to these groups previously recorded within the retail segment will now be classified in our corporate and other segment to better align the cost reporting with the support services. The change in segment reporting has no impact on the net profit or loss of the Company. To enable comparisons with prior period performance, historical segment information for the periods included in the tables below reflect this reporting change.

On June 29, 2018, the Company completed the sale of its GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse Group via its FX unit, 360T, for a total purchase price of $100 million subject to a customary working capital adjustment. The Company determined that the institutional segment met the discontinued operations criteria set forth in ASC Subtopic 205-20-45, Presentation of Financial Statements, in the quarter ended June 30, 2018. As such, the institutional segment results have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For more information relating to the discontinued operations of the Company's GTX ECN business, please see Note 3.

Retail Segment

Business in the retail segment is conducted primarily through the Company’s FOREX.com and City Index brands. The Company provides its retail customers around the world with access to over 12,500 global financial markets, including spot forex, precious metals, and CFDs on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products, as well as OTC options on forex. In the United Kingdom, the Company also offer spread bets, which are investment products similar to CFDs, but that offer more favorable tax treatment to residents of that country.

Futures Segment

The futures segment offers execution and related services for exchange-traded futures, including futures on Bitcoin, and futures options on major U.S. and European exchanges. The Company offers futures services through its subsidiary, GAIN Capital Group, LLC, under several brands, including GAIN Capital Futures. In addition, in 2014, the Company expanded its futures business by acquiring majority interests in GAA and TT.

Corporate and other

Corporate and other provides general corporate services to the Company’s segments and also includes expense eliminations between operating segments, which were $0.4 million and $0.6 million for the three months ended June 30, 2018 and 2017, respectively, and $0.9 million and $1.1 million for the six months ended June 30, 2018 and 2017, respectively. Corporate and other revenue primarily comprises foreign currency transaction gains and losses.

Selected financial information by segment is presented in the following tables (amounts in thousands):

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	Retail
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	74,532		$	80,605		$	160,205		$	120,692
Employee compensation and benefits	13,648			14,405			29,072			27,740
Selling and marketing	6,496			7,244			12,161			16,150
Referral fees	7,040			9,826			14,726			22,149
Other operating expenses	18,279			15,217			36,011			28,620
Segment profit	$	29,069		$	33,913		$	68,235		$	26,033
	Futures
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	12,100		$	10,013		$	23,591		$	20,980
Employee compensation and benefits	2,863			2,494			5,374			5,045
Selling and marketing	202			221			443			486
Referral fees	3,424			3,486			7,169			7,604
Other operating expenses	3,556			3,234			7,349			6,976
Segment profit	$	2,055		$	578		$	3,256		$	869
	Corporate and Other
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Other revenue/(loss)	$	(2,447	)	$	(27	)	$	(1,251	)	$	99
Employee compensation and benefits	5,962			6,112			12,365			10,749
Selling and marketing	69			52			133			116
Other operating expenses	3,711			2,578			6,970			5,234
Loss	$	(12,189	)	$	(8,769	)	$	(20,719	)	$	(16,000	)

Reconciliation of operating segment profit to Income before income tax expense

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Retail segment	$	29,069		$	33,913		$	68,235		$	26,033
Futures segment	2,055			578			3,256			869
Corporate and other	(12,189		)	(8,769		)	(20,719		)	(16,000		)
SEGMENT PROFIT	18,935			25,722			50,772			10,902
Depreciation and amortization	5,341			4,121			10,709			7,949
Purchased intangible amortization	3,612			3,817			7,280			6,883
Restructuring expenses	25			—			25			—
Impairment of investment	—			—			(130		)	—
OPERATING PROFIT/(LOSS)	9,957			17,784			32,888			(3,930		)
Interest expense on long term borrowings	3,388			2,694			6,728			5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE	$	6,569		$	15,090		$	26,160		$	(9,289	)

20. SUBSEQUENT EVENTS

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On July 26, 2018, the Company announced the payment of a $0.06 dividend per share of Common Stock payable on September 18, 2018 to stockholders of record on September 11, 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING INFORMATION

In this Quarterly Report on Form 10-Q, the words “GAIN,” the “Company,” “our,” “we” and “us” refer to GAIN Capital Holdings, Inc. and, except as otherwise specified herein, to GAIN’s subsidiaries. GAIN’s fiscal quarter ended on June 30, 2018.

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the Selected Financial Data and the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission on March 14, 2018, and the Condensed Consolidated Financial Statements and Notes thereto contained in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains a number of forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which GAIN operates and management’s current beliefs and assumptions. Any statements contained herein (including, without limitation, statements to the effect that management or GAIN “believes,” “expects,” “anticipates,” “plans” and similar expressions) that are not statements of historical fact should be considered forward-looking statements and should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this report and the discussion below. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. These factors include, without limitation, those set forth in the section entitled “Item 1A – Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, and discussed elsewhere in this Quarterly Report on Form 10-Q. The risks and uncertainties described therein and herein are not the only ones we face. We expressly disclaim any obligation to update any forward-looking statements, except as may be required by law.

OVERVIEW

We are a global provider of trading services and solutions, specializing in over-the-counter, or OTC, and exchange-traded markets. Our retail and futures segments service customers in more than 180 countries worldwide, and we conduct business from our offices in Bedminster, New Jersey; Jersey City, New Jersey; Chicago, Illinois; Powell, Ohio; London, England; Cornwall, England; Tokyo, Japan; Sydney, Australia; Shanghai, China; Hong Kong; Dubai, U.A.E.; and Singapore.

We have invested considerable resources since our inception to develop our proprietary trading platforms to provide our customers with advanced price discovery, trade execution and order management functions, while improving our ability to acquire and service our customers efficiently, as well as manage market and credit risk associated with our customer’s trading activity. Today our customers can trade through web-based, downloadable and mobile trading platforms and have access to innovative trading tools to assist them with research and analysis, automated trading and account management.

We currently operate our business in two segments. Through our retail segment, we provide customers around the world access to a diverse range of global financial markets. We offer our customers access to over 12,500 financial products, including spot foreign exchange (forex), precious metals trading, as well as contracts for difference (CFDs), which are investment products with returns linked to the performance of underlying assets. We offer CFDs on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products. In the United Kingdom, we offer spread bets, which are investment products similar to CFDs, but that offer more favorable tax treatment for residents of that country. In addition to these OTC products, our futures segment offers exchange-traded futures, including on Bitcoin, and options on futures on more than 30 global exchanges. Each of our operating segments is discussed in more detail below. For financial information regarding our segments, please see Note 19 to our Condensed Consolidated Financial Statements elsewhere in this report.

As a global provider of online trading services, our results of operations are impacted by a number of external factors, including market volatility, competition, the regulatory environment in the various jurisdictions and markets in which we operate and the financial condition of the retail customers to whom we provide our services. These factors are not the only factors that impacted our results of operations for the most recent fiscal period, and additional factors may impact our results of operations in future periods. In addition, please refer to “Part II - Item 1A. Risk Factors” for a discussion of other factors that may impact our business.

Market Environment and Trading Volatility

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Our revenue and operating results may vary significantly from period to period primarily due to movements and trends in the world’s financial markets and to fluctuations in market volatility. Market volatility is driven by a range of external factors, some of which are market specific and some of which are correlated to general macroeconomic conditions. As a general rule, our businesses typically benefit from volatility in the prices of the products that we offer, as periods of increased volatility often coincide with more clients trading and a higher volume of transactions per client. However, periods of extreme volatility may result in significant market dislocations that can also lead clients to reduce their trading activity. In addition, volatility that results in market prices moving within a relatively narrow band of prices may lead to less profitable trading activity. Also, low or extremely high market volatility can adversely affect our ability to profitably manage our net exposure, which represents the unhedged portion of the trading positions we enter into with customers in our retail segment.

Our financial performance for the six months ended June 30, 2018 reflects a continuing return to more normalized volatility levels from the subdued levels in 2017, providing a market environment in which we were able to benefit from the execution of our strategic priorities and our investment in organic initiatives over the past year.

Competition

The products we offer have generally been accessible to retail investors for a significantly shorter period than many other securities products, such as cash equities, and our industry is rapidly evolving and characterized by intense competition. Entering new markets often requires us to lower our pricing in order to attract customers and compete with other companies which have already established customer bases in such markets. In addition, in existing markets, on occasion we make short-term decisions to be more aggressive regarding the pricing we offer our customers, or we may decide to offer additional services at reduced rates, or free of charge, in order to attract customers and take market share from our competitors.

Regulatory Environment

The major global regulatory overhaul of financial markets which occurred following the financial crisis in 2008 has generally continued in the various jurisdictions in which we operate. Early examples of such overhaul in the United States included passage of the Dodd-Frank Act and various related amendments to the Commodity Exchange Act. More recently, in December 2016, the FCA issued a consultation paper, referred to as CP16/40, that included a number of proposed changes to the regulatory requirements relating to companies, such as GCUK, that offer CFDs and spread bets in the U.K. These proposed requirements included enhanced risk disclosures, a ban on offering account bonuses or similar promotional incentives to clients, mandatory margin close-out levels for retail clients and limitations on the leverage that may be offered to clients, with the limitations varying based on whether the clients are classified as experienced or inexperienced using criteria identified by the FCA. In June 2017, the FCA stated that any further action would be delayed pending action by the European Securities and Markets Authority, which has been reviewing the regulation of CFDs by various European regulators for several years.

In March 2018, ESMA announced product intervention measures to further regulate the marketing, distribution or sale of CFDs to retail investors in the European Union. These measures include leverage limits which vary based on the underlying asset, a margin close out rule on a per account basis, negative balance protection on a per account basis, a restriction on incentives offered to trade CFDs and a required standardized risk warning.  These measures have now been published in the Official Journal of the European Union and became effective on August 1,2018. While the restrictions on leverage are expected to affect our clients' trading patterns, the Company has taken actions it believes will mitigate the impact of ESMA’s regulations and currently does not expect the regulations will have a material adverse impact on the Company’s results of operations or financial condition.

As a result of historical and/or future regulatory changes, we may be required to change our business strategy, including the nature of the products that we offer, the target market for our products or our overall strategy toward one or more geographic markets.

Part of our growth strategy is to enter new markets, and as we do so we will become subject to regulation in those markets. Complying with different regulatory regimes in multiple markets is expensive, and in many markets the regulatory environment is unclear and evolving.

Sale of GTX ECN Business

On June 29, 2018, we completed the sale of the assets of our GTX ECN business, an institutional platform for trading foreign exchange, to 360T, a subsidiary of Deutsche Börse AG, pursuant to an Asset Purchase Agreement dated as of May 29, 2018 (the "Purchase Agreement"). The Purchase Agreement provides for a cash purchase price for the GTX business of $100 million, subject to a customary working capital adjustment. The Purchase Agreement contains customary representations and warranties

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that generally survive until the first anniversary of the closing date. We have also agreed to certain non-competition and non-solicitation obligations relating to the GTX business and its employees that expire on the third anniversary of the closing date. We will continue to provide certain transition services to the buyer for an initial period of 3 months following the closing date, and the parties have entered into commercial agreements relating to a continued business relationship between GAIN and 360T.

Prior to its sale, we reported the results of our GTX ECN business as part of our institutional segment. We have determined that the institutional reportable segment met the discontinued operations criteria set forth in ASC Subtopic 205-20-45, Presentation of Financial Statements, in the quarter ended June 30, 2018. As such, the institutional segment results have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For more information relating to the discontinued operations of our GTX ECN business, please see Note 3 to our Condensed Consolidated Financial Statements elsewhere in this report.

FXCM Asset Acquisition

On February 7, 2017, we entered into an Asset Purchase Agreement (the "Purchase Agreement") with Forex Capital Markets L.L.C. (“FXCM"). Pursuant to the terms of the Purchase Agreement, FXCM transferred substantially all of its U.S.-domiciled customer accounts to us effective as of February 24, 2017. In consideration of the transfer of these accounts, we agreed to pay FXCM, without duplication:

• $500 per account for each transferred account that first executes a new trade with us 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 us during the Initial Period and (ii) executes a new trade with us during the 77-day period immediately following the last day of the Initial Period.

We paid $7.2 million to FXCM as consideration for the purchased accounts, which were capitalized and included as an intangible asset to be amortized on a straight line basis over its two year useful life.

Credit Facility

On August 3, 2017, we entered into a Credit Agreement (the “Credit Agreement”), with Barclays Bank PLC (“Barclays”), as Administrative Agent, Collateral Agent, Arranger and Documentation Agent, Sterling National Bank as Joint Bookrunner (“Sterling”), and the other lenders from time to time party thereto (together with Barclays and Sterling, the “Lenders”).

The Credit Agreement provides for a U.S. $50.0 million senior secured first lien revolving credit facility (the “Facility”), to be made available upon certain terms and conditions described below. Upon our request, the Facility may be increased by up to $25.0 million, with a minimum increase of $5.0 million. Each Lender has the absolute discretion to provide all or any part of the requested increase, or to decline to participate in the increase. Amounts available under the Facility may be borrowed, repaid and reborrowed on and after the closing date until the third anniversary of the closing date (the “Maturity Date”). All amounts outstanding under the Facility will initially bear interest, at our option, at a rate per annum equal to (i) the “Cost of Funds Rate” or, if applicable, “Base Rate” plus 1.75% per annum, or (ii) “LIBOR Rate” plus 2.75% per annum, in each case as such terms are defined in the Credit Agreement. Beginning on the date on which we deliver to the Lenders financial statements for the first full fiscal quarter after the closing date, the applicable margin for the Facility will be determined on a sliding scale based on our Consolidated Gross Leverage Ratio (as defined in the Facility). As of June 30, 2018 the interest rate is 7.00%.

All obligations under the Facility are guaranteed by each of our direct or indirect wholly-owned domestic subsidiaries (excluding our regulated subsidiaries) (collectively, the “Guarantors”). The obligations under the Facility are secured by a first priority security interest in all of the capital stock of each subsidiary owned by us or a Guarantor (collectively, the “Collateral”), which pledge, in the case of any foreign subsidiary, is limited to 65.0% of the voting stock of such foreign subsidiary and is limited to foreign subsidiaries directly owned by us or a Guarantor.

The Facility contains customary financial covenants, tested quarterly, including with respect to our Consolidated Gross Leverage Ratio, Consolidated Interest Coverage Ratio and Minimum Net Capital, in each case as such terms are defined in the Credit Agreement. The Facility contains such representations and warranties by us and the Guarantors as are customary for transactions and facilities of this type, subject to baskets for permitted acquisitions, dispositions, incurrence of additional indebtedness and similar transactions. The Facility also contains events of default that are customary for transactions and facilities of this type (subject to applicable grace periods and materiality standards).

Convertible Notes

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On August 22, 2017, we issued $92.0 million aggregate principal amount of our 5.00% Convertible Senior Notes due 2022, which amount includes the exercise in full of the over-allotment option granted to the initial purchasers of the notes, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes bear interest at a fixed rate of 5.00% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018. The notes are convertible into cash, shares of our common stock, or a combination thereof, at our election. The notes will mature on August 15, 2022, unless earlier converted, redeemed or repurchased. We may not redeem the notes prior to August 15, 2020. The net proceeds from the offering of these notes were approximately $88.4 million, after deducting discounts to the initial purchasers and offering expenses payable by the Company.

Key Income Statement Line Items and Key Operating Metrics

The following section briefly describes the key components of our revenues and expenses, our use of non-GAAP financial measures, and key operating metrics we use to evaluate the performance of our business.

Revenue

Revenue from our business consists of retail revenue, futures revenue, other revenue and interest revenue.

Retail Revenue

Retail revenue is our largest source of revenue. Retail revenue is principally comprised of trading revenue from our retail segment.

Trading revenue in our retail segment is generated by customer activity in spot forex, precious metals, spread bets and CFDs on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products, as well as OTC options.

We generate revenue in our retail segment in two ways: (1) trading revenue from our market making activities for OTC products, earned principally from the bid/offer spread we offer our customers and fees, including financing charges for positions held overnight, commissions on equity CFD trades, and other account related fees and (2) any net gains and losses generated through changes in the market value of the currencies and other products held in our net exposure.

For the three and six months ended June 30, 2018, retail revenue represented 85.6% and 85.5% of our total net revenue, respectively. For the three and six months ended June 30, 2017, retail revenue represented 87.3% and 83.2% of our total net revenue, respectively.

For the three and six months ended June 30, 2018, approximately 97% and 97%, respectively, of our average daily retail trading volume was either naturally hedged or hedged by us with one of our liquidity providers, and the remaining 3% and 3%, respectively, of our average daily retail trading volume consisted of our net exposure. For the three and six months ended June 30, 2017, approximately 98% and 97%, respectively, of our average daily retail trading volume was either naturally hedged or hedged by us with one of our liquidity providers, and the remaining 2% and 3%, respectively, of our average daily retail trading volume consisted of our net exposure

We manage our net exposure by applying position and exposure limits established under our risk-management policies and by continuous, active monitoring by our trading and risk teams. Based on our risk management policies and procedures, over time a portion of our net exposure may be hedged with our liquidity providers. Although we do not actively initiate proprietary market positions in anticipation of future movements in the relative prices of the products we offer, through our net exposure we are likely to have open positions in various products at any given time. In the event of unfavorable market movements, we may experience losses on such positions. See “Our Retail Segment - Sophisticated Risk Management” in Item 1. Business, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for further details regarding our risk management policies for the retail segment.

Futures Revenue

Futures revenue comprises primarily of commissions earned on futures and futures options trades. We act as an agent for the trades executed in our futures segment and are not exposed to market risk in connection with that activity.

Other Revenue

Other revenue primarily comprises foreign currency translation gains and losses, as well as account related fees.

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Net Interest Revenue

Net interest revenue/expense consists primarily of the revenue generated by our cash and customer cash held by us at banks and on deposit as collateral with our liquidity providers as well as U.S. Treasury bill, less interest paid to our customers.

Our cash and customer cash is generally invested in money market funds, which primarily invest in short-term United States government securities, treasury bills, and other money market instruments. Interest paid to customers varies primarily due to the net value of a customer account. A customer’s net account value equals cash on deposit plus the mark-to-market of open positions as of the measurement date. Interest income and interest expense are recorded when earned and incurred, respectively. Net interest revenue was $2.4 million for the three months ended June 30, 2018, compared to net interest revenue of $1.1 million for the three months ended June 30, 2017.

Expenses

Our expenses are principally comprised of the following:

Employee Compensation and Benefits

Employee compensation and benefits includes salaries, bonuses, commissions, stock-based compensation, contributions to benefit programs and other related employee costs.

Selling and Marketing

Our marketing strategy employs a combination of direct online marketing and focused branding programs, with the goal of raising awareness and cost-effectively acquiring customers for our products and services, as well as client engagement and retention.

Referral Fees

Referral fees consist of compensation paid to our white label partners and introducing brokers. We generally provide white label partners with the platform, systems, and back-office services necessary for them to offer trading services to their customers. Introducing brokers identify and direct customers to the Company.

Referral fees are largely variable and change principally based on the level of customer trading volume directed to us from our white label partners and introducing brokers, the specific terms of our agreements with the white label partners and introducing brokers, which vary on a partner-by-partner and regional basis, and the relative percentage of trading volume generated from particular relationships in any given period. The majority of our white label and introducing broker partners are paid based on the trading volume generated by the customers they introduce, directly or indirectly, to us, rather than on a revenue sharing basis. As such, during periods in which their customers’ trading activity is not profitable for us, if the associated trading volume remains high, we may be required to make larger payments to these partners despite the fact that we are generating lower revenue from the customers that they have introduced. Our indirect business accounted for 24.8% and 24.0% of retail trading volume in the three and six months endedJune 30, 2018, and 30.9% and 35.3% in the three and six months ended June 30, 2017, respectively. The decline in indirect volume was due to our focus on expanding our direct business and efforts to optimize our indirect channel.

Trading Expenses

Trading expenses consist of exchange fees paid to exchanges and other third-parties for exchange market data that we provide to our customers or use to create our own derived data products, as well as fees for news services and fees paid to prime brokers in connection with our futures segment.

General and Administrative

General and administrative expenses consist of bank fees, professional fees, occupancy and equipment and other miscellaneous expenses.

Depreciation and Amortization

Depreciation and amortization consists of the recognition of expense for physical assets and software purchased for use over a period of several years and of the amortization of internally developed software.

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Purchased Intangible Amortization

Purchased intangible amortization consists of amortization related to intangible assets we acquired in connection with our acquisitions. The principal intangible assets acquired were technology, customer relationships and trademarks. These intangible assets have useful lives ranging from one year to ten years.

Communications and Technology

Communications and technology consists of communications fees, data fees, product development, software and maintenance expenses.

Bad Debt Provision

Bad debt provision represents the amounts estimated for the uncollectibility of certain outstanding balances during the period.

Interest Expense on Long Term Borrowings

Interest expense on long term borrowings consists of interest expense on our 4.125% Convertible Senior Notes due 2018, issued in November2013, interest expense on our 4.125% Convertible Senior Notes due 2020, issued in April2015 as part of the consideration for the City Index acquisition, and interest expense on our 5.00% Convertible Senior Notes due 2022, issued in August 2017.

Operating Metrics

We review various key operating metrics, which are described below, to evaluate the performance of our businesses.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Retail
OTC Trading Volume (billions) (1)	$	679.6	$	646.4	$	1,474.9	$	1,265.7
OTC Average Daily Volume (billions)	$	10.6	$	9.9	$	11.5	$	9.7
12 Month Trailing Active OTC Accounts (2)	130,018		134,120		130,018		134,120
3 Month Trailing Active OTC Accounts (2)	76,654		83,511		$	76,654	$	83,511
Client Assets (millions)	$	711.4	$	732.9	$	711.4	$	732.9
Futures
Number of Futures Contracts (3)	2,073,684		1,655,166		4,233,915		3,715,797
Futures Average Daily Contracts	32,401		26,272		33,871		29,726
12 Month Trailing Active Futures Accounts (2)	7,881		7,885		7,881		7,885
Client Assets (millions)	$	209.0	$	214.4	$	209.0	$	214.4

(1) US dollar equivalent of notional amounts traded

(2) Accounts that executed a transaction during the relevant period

(3) Futures contracts represent the total number of contracts transacted by customers of our futures business

OTC Trading Volume

OTC trading volume is the U.S. dollar equivalent of the aggregate notional value of OTC trades executed by customers in our retail segment.

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OTC Average Daily Volume

Average daily volume is the U.S. dollar equivalent of the aggregate notional value of trades executed by our customers in a given period divided by the number of trading days in the given period.

Active OTC Accounts

Active OTC accounts represents retail segment customers who executed at least one trade during the relevant period. We believe active OTC accounts is an important operating metric because it correlates to trading volume and revenue in our retail segment.

Client Assets

Client assets represent amounts due to clients in our retail and futures segments, including customer deposits and unrealized gains or losses arising from open positions.

Number of Futures Contracts

Number of futures contracts represent the total number of contracts transacted by customers in our futures segment.

Futures Average Daily Contracts

Average daily futures contracts is the number of futures contracts transacted by our futures customers in a given period divided by the number of trading days in the given period.

Active Futures Accounts

Active futures accounts represent customers who executed at least one futures trade during the relevant period.

We believe that our customer trading volumes are driven by eight main factors. Four of these factors are broad external factors outside of our control that generally impact customer trading volumes, and include:

• overall economic conditions and outlook;

• volatility of financial markets;

• legislative changes; and

• regulatory changes.

The volatility of financial markets has generally been positively correlated with customer trading volume. Our customer trading volume is also affected by the following four additional factors:

• 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.

In order to increase customer trading volume, we focus our marketing and our customer service and education activities on attracting new customers and extending the duration and scope of the relationship our customers have with us.

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RESULTS OF OPERATIONS

Discontinued Operations

In light of the sale of our GTX ECN business in June 2018, which comprised our institutional segment, the results of the institutional segment are presented as discontinued operations in our Consolidated Statements of Operations and Comprehensive Income.

Unless otherwise stated, financial results discussed herein refer to our continuing operations in our retail, futures and corporate and other segments.

Revenue

	Three Months Ended June 30,										Six Months Ended June 30,
	(amounts in thousands)										(amounts in thousands)
	2018			2017		$ Change			% Change		2018		2017		$ Change			% Change
REVENUE:
Retail revenue	$	72,032		$	79,079	$	(7,047	)	(8.9	)%	$	156,152	$	118,010	$	38,142		32.3	%
Futures revenue	11,129			9,565		1,564			16.4	%	21,774		20,145		1,629			8.1	%
Other (loss)/revenue	(1,411		)	822		(2,233		)	(271.7	)%	484		1,833		(1,349		)	(73.6	)%
Total non-interest revenue	81,750			89,466		(7,716		)	(8.6	)%	178,410		139,988		38,422			27.4	%
Interest revenue	2,827			1,261		1,566			124.2	%	4,901		2,082		2,819			135.4	%
Interest expense	392			136		256			188.2	%	766		299		467			156.2	%
Total net interest revenue	2,435			1,125		1,310			116.4	%	4,135		1,783		2,352			131.9	%
Net revenue	$	84,185		$	90,591	$	(6,406	)	(7.1	)%	$	182,545	$	141,771	$	40,774		28.8	%

The decrease in retail revenue for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to a decrease in revenue capture. The increase in retail revenue for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to an increase in trading volume, as well as a slight increase in revenue capture. The increased trading volume for the six months ended June 30, 2018 primarily reflects a return to more normalized volatility levels as compared to historically low levels experienced in the six months ended June 30, 2017.

The increase in futures revenue for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to an increase in volumes across all lines of business.

The decrease in other revenue for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to the impact of foreign currency revaluation.

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Expenses

	Three Months Ended June 30,											Six Months Ended June 30,
	(amounts in thousands)											(amounts in thousands)
	2018			2017			$ Change			% Change		2018			2017			$ Change			% Change
Employee compensation and benefits	$	22,473		$	23,011		$	(538	)	(2.3	)%	$	46,811		$	43,534		$	3,277		7.5	%
Selling and marketing	6,767			7,517			(750		)	(10.0	)%	12,737			16,752			(4,015		)	(24.0	)%
Referral fees	10,464			13,312			(2,848		)	(21.4	)%	21,895			29,753			(7,858		)	(26.4	)%
Trading expenses	5,541			4,863			678			13.9	%	11,352			10,334			1,018			9.9	%
General and administrative	14,228			11,835			2,393			20.2	%	26,692			21,064			5,628			26.7	%
Depreciation and amortization	5,341			4,121			1,220			29.6	%	10,709			7,949			2,760			34.7	%
Purchased intangible amortization	3,612			3,817			(205		)	(5.4	)%	7,280			6,883			397			5.8	%
Communications and technology	5,495			4,497			998			22.2	%	10,886			9,526			1,360			14.3	%
Bad debt provision	282			(166		)	448			269.9	%	1,400			(94		)	1,494			1,589.4	%
Restructuring expenses	25			—			25			100.0	%	25			—			25			100.0	%
Impairment of investment	—			—			—			—	%	(130		)	—			(130		)	(100.0	)%
Total operating expense	74,228			72,807			1,421			2.0	%	149,657			145,701			3,956			2.7	%
OPERATING PROFIT/(LOSS)	9,957			17,784			(7,827		)	(44.0	)%	32,888			(3,930		)	36,818			936.8	%
Interest expense on long term borrowings	3,388			2,694			694			25.8	%	6,728			5,359			1,369			25.5	%
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE/(BENEFIT)	6,569			15,090			(8,521		)	(56.5	)%	26,160			(9,289		)	35,449			381.6	%
Income tax (benefit)/expense	(263		)	1,533			(1,796		)	(117.2	)%	7,413			(4,401		)	11,814			268.4	%
Equity in net loss of affiliate	$	—		$	(34	)	34			100.0	%	$	—		$	(54	)	54			(100.0	)%
Net income/(loss) from continuing operations	$	6,832		$	13,523		(6,691		)	(49.5	)%	$	18,747		$	(4,942	)	23,689			479.3	%
Income from discontinued operations, including gain on sale of $69,581, net of income tax of $9,806	$	60,642		$	569		$	60,073		NM		$	64,988		$	248		$	64,740		NM

The decrease in employee compensation and benefits for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily related to a decrease in the Company's incentive compensation plan based on financial performance during the quarter. Employee compensation and benefits for the six months ended June 30, 2018increased compared to the six months ended June 30, 2017 primarily due to an increase in the Company's incentive compensation plan based on financial performance during the year.

The decrease in selling and marketing expense for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to decreases in marketing expenditures for our retail segment in the first and second quarters ahead of a planned upgrade of our US service in the second half of 2018, including the anticipated launch of a new retail trading platform.

The decrease in referral fees for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to the decrease in indirect volume and a lower referral fee per million due to ongoing optimization efforts during the three and six months endedJune 30, 2018.

The increase in trading expenses for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to increased clearing fees due to higher volumes.

The increase in general and administrative expenses for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was due to an increase in payment processing fees and spreadbet duty driven by higher customer engagement and an increase in professional fees related to tax and legal services. The increase in general and administrative expenses also reflected an increase in value-added sales tax in the U.K. caused by our recovering a smaller

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portion of such taxes as compared to the prior periods due to a change in the mix of business booked through our UK operating subsidiary, as well as the effect of a one-time credit received in the prior year.

The increase in communications and technology expense for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to an increase in software maintenance costs.

The increase in bad debt provision for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was due to the negative balances experienced by certain of our customers due to the increased volatility during the three and six months endedJune 30, 2018 compared to the recovery of customer bad debt for the three and six months endedJune 30, 2017.

Income tax expense for the three months ended June 30, 2018decreased by $1.8 million, with a tax benefit of $0.3 million compared to a tax expense of $1.5 million in the three months ended June 30, 2017. Income tax expense for the six months ended June 30, 2018increased by $11.8 million, with a tax expense of $7.4 million compared to a tax benefit of $4.4 million in the six months ended June 30, 2017.

The increase in income from discontinued operations, net of tax for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to gain on sale of our GTX ECN business. The net income for the institutional segment was accounted for as discontinued operations as presented in Note 3 to our Condensed Consolidated Financial Statements elsewhere in this report.

Segment Results - Three and Six Months EndedJune 30, 2018 Compared to Three and Six Months EndedJune 30, 2017

Retail Segment (amounts in thousands)

	Three Months Ended June 30,									Six Months Ended June 30,
	2018		2017		$ Change			% Change		2018		2017		$ Change			% Change
Net revenue	$	74,532	$	80,605	$	(6,073	)	(7.5	)%	$	160,205	$	120,692	$	39,513		32.7	%
Employee compensation and benefits	13,648		14,405		(757		)	(5.3	)%	29,072		27,740		1,332			4.8	%
Selling and marketing	6,496		7,244		(748		)	(10.3	)%	12,161		16,150		(3,989		)	(24.7	)%
Referral fees	7,040		9,826		(2,786		)	(28.4	)%	14,726		22,149		(7,423		)	(33.5	)%
Other operating expenses	18,279		15,217		3,062			20.1	%	36,011		28,620		7,391			25.8	%
Segment profit	$	29,069	$	33,913	$	(4,844	)	(14.3	)%	$	68,235	$	26,033	$	42,202		162.1	%

The decrease in retail segment revenue for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to decrease in revenue capture. The increase in retail segment revenue for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to an increase in volume related to direct customers, as well as a slight increase in revenue capture.

The decrease in employee compensation and benefits expenses for the retail segment for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to a decrease in the Company's incentive compensation plan based on quarterly results. The increase in employee compensation and benefits expenses for the retail segment for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to an increase in the Company's incentive compensation plan based on year-to-date results.

The decrease in selling and marketing expense for the retail segment for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to reduced spend in the first and second quarters ahead of a planned upgrade of our US service in the second half of 2018, including the anticipated launch a new trading platform.

The decrease in referral fees for the retail segment for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to the decrease in indirect volume and a lower referral fee per million due to ongoing optimization efforts during the three and six months endedJune 30, 2018.

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The increase in other operating expenses for the retail segment for the three and six months ended June 30, 2018 compared to the three and six months ended June 30, 2017 was primarily due to the increase in bad debt provision due to the negative balances experienced by certain of our customers during the three and six months endedJune 30, 2018, increased payment processing fees and spreadbet duty driven by higher customer engagement and an increase in communications and technology expense for software maintenance.The increase in other operating expenses also reflected an increase in value-added sales tax in the U.K. caused by our recovering a smaller portion of such taxes as compared to the prior periods due to a change in the mix of business booked through our U.K. operating subsidiary, as well as the effect of a one-time credit received in the prior year.

Other operating expenses for the retail segment include general and administrative expenses, communication and technology expenses, trading expenses and bad debt.

Futures Segment (amounts in thousands)

	Three Months Ended June 30,									Six Months Ended June 30,
	2018		2017		$ Change			% Change		2018		2017		$ Change			% Change
Net revenue	$	12,100	$	10,013	$	2,087		20.8	%	$	23,591	$	20,980	$	2,611		12.4	%
Employee compensation and benefits	2,863		2,494		369			14.8	%	5,374		5,045		329			6.5	%
Selling and marketing	202		221		(19		)	(8.6	)%	443		486		(43		)	(8.8	)%
Referral fees	3,424		3,486		(62		)	(1.8	)%	7,169		7,604		(435		)	(5.7	)%
Other operating expenses	3,556		3,234		322			10.0	%	7,349		6,976		373			5.3	%
Segment profit	$	2,055	$	578	$	1,477		255.5	%	$	3,256	$	869	$	2,387		274.7	%

The increase in futures segment revenue for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to an increase in volumes across all lines of business.

The increase in employee compensation and benefits expenses for the futures segment for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to an increase in sales commissions based on the increase in volume as well as an increase in the Company's incentive compensation plan based on year-to-date results.

Selling and marketing expenses for the futures segment remained relatively flat for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017.

The decrease in referral fees for the futures segment for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily related to a decrease in indirect referral fees per contract for the three and six months endedJune 30, 2018 due to an increase in volume from customers introduced by lower cost partners.

The increase in operating expenses for the futures segment for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to an increase in trading costs related to higher volumes.

Other operating expenses from the futures segment include general and administrative expenses, communication and technology expenses, trading expenses and bad debt.

Corporate and Other (amounts in thousands)

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	Three Months Ended June 30,											Six Months Ended June 30,
	2018			2017			$ Change			% Change		2018			2017			$ Change			% Change
Other revenue	$	(2,447	)	$	(27	)	$	(2,420	)	(8,963	)%	$	(1,251	)	$	99		$	(1,350	)	(1,364	)%
Employee compensation and benefits	5,962			6,112			(150		)	(2	)%	12,365			10,749			1,616			15	%
Selling and marketing	69			52			17			33	%	133			116			17			15	%
Other operating expenses	3,711			2,578			1,133			44	%	6,970			5,234			1,736			33	%
Loss	$	(12,189	)	$	(8,769	)	$	(3,420	)	(39	)%	$	(20,719	)	$	(16,000	)	$	(4,719	)	(29	)%

The decrease in corporate and other revenue for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to the impact of foreign currency revaluation.

The decrease in employee compensation and benefits expenses for employees not attributed to any of our operating segments, such as our executive officers, for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to a decrease in the Company's incentive compensation plan based on quarterly results. The increase in employee compensation and benefits expenses for employees not attributed to any of our operating segments for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to an increase in the Company's incentive compensation plan based on year-to-date results.

Selling and marketing expenses not attributed to any of our operating segments remained relatively flat for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017.

The increase in other operating expenses not attributed to any of our operating segments for the three and six months endedJune 30, 2018 compared to the three and six months endedJune 30, 2017 was primarily due to an increase in professional fees related to tax and legal services. The increase in other operating expenses also reflected an increase in value-added sales tax in the U.K. caused by our recovering a smaller portion of such taxes as compared to the prior periods due to a change in the mix of business booked through our U.K. operating subsidiary, as well as the effect of a one-time credit received in the prior year.

Liquidity and Capital Resources

We have historically financed our liquidity and capital needs primarily through the use of funds generated from operations by our subsidiaries, the issuance of debt and equity securities, including the 4.125% Convertible Senior Notes due 2018 that we issued in the fourth quarter of 2013, the 4.125% Convertible Senior Notes due 2020 that were issued in 2015 in connection with our acquisition of City Index, the 5.00% Convertible Senior Notes due 2022 that were issued in the third quarter of 2017, and access to secured lines of credit, such as the revolving credit facility entered into in August 2017. In June 2018, we completed the sale of our GTX ECN business for a purchase price of $100 million, resulting in cash sale proceeds of approximately $85.0 million, net of taxes and transaction-related expenses and fees. We plan to finance our future operating liquidity and regulatory capital needs in a manner consistent with our past practice. We expect that our capital expenditures for the next 12 months will be lower than the comparable prior period, as we continue to identify areas for savings.

Our cash and cash equivalents and customer cash and cash equivalents are held in cash and cash equivalents including cash at banks, deposits at liquidity providers, in money market funds that invest in highly liquid investment grade securities including short-term U.S. treasury bills, as well as directly in U.S. treasury bills. In general, we believe all of our investments and deposits are of high credit quality and we have more than adequate liquidity to conduct our businesses.

Several of our operating subsidiaries are subject to requirements of regulatory bodies, including the CFTC and NFA in the United States, the FCA in the United Kingdom, the FSA, METI and MAFF in Japan, the SFC in Hong Kong, IIROC and the OSC in Canada, MAS in Singapore, ASIC in Australia, and the CIMA in the Cayman Islands, which limit funds available for the payment of dividends to GAIN Capital Holdings, Inc. As a result, we may be unable to access funds which are generated by our operating subsidiaries when we need them.

Regulatory Capital Requirements

The following table illustrates the minimum regulatory capital our subsidiaries were required to maintain as of June 30, 2018 and the actual amounts of capital that were maintained on that date (amounts in millions):

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Entity Name	Minimum Regulatory Capital Requirements		Capital Levels Maintained		Excess Net Capital
GAIN Capital Group, LLC	$	35.8	$	48.8	$	13.0
GAIN Capital Securities, Inc.	0.1		0.4		0.3
GAIN Capital U.K., Ltd.	66.4		201.2		134.8
GAIN Capital Japan Co., Ltd.	1.6		9.5		7.9
GAIN Capital Australia, Pty. Ltd.	0.7		5.4		4.7
GAIN Capital-Forex.com Hong Kong, Ltd.	1.9		3.4		1.5
GAIN Global Markets, Inc.	0.4		2.0		1.6
GAIN Capital-Forex.com Canada, Ltd.	0.2		1.4		1.2
GAIN Capital Singapore Pte., Ltd.	0.3		7.4		7.1
Trade Facts, Ltd.	0.6		3.5		2.9
Global Asset Advisors, LLC	—		1.4		1.4
GAIN Capital Payments Ltd.	0.1		0.4		0.3
GTX SEF, LLC	0.8		1.0		0.2
Total	$	108.9	$	285.8	$	176.9

Our futures commission merchant and forex dealer subsidiary, GCG, LLC (“GCGL”), is subject to the Commodity Futures Trading Commission Net Capital Rule (Rule 1.17) and NFA Financial Requirements, Sections 1 and 11. Under applicable provisions of these regulations, GCGL is required to maintain adjusted net capital of the greater of $1.0 million or 8% of Customer and Non-Customer Risk Maintenance Margin, or $20.0 million plus 5% of all liabilities owed to retail customers exceeding $10.0 million, plus 10% of all liabilities owed to eligible contract participant counterparties acting as a dealer that are not an affiliate. Net capital represents current assets less total liabilities as defined by CFTC Rule 1.17. GCGL’s current assets primarily consist of cash and cash equivalents reported on its balance sheet as cash, receivables from brokers and trading securities, which are generally short-term U.S. government securities. GCGL’s total liabilities include payables to customers, accrued expenses, accounts payable, sales and marketing expense payable, introducing broker fees payable and other liabilities. From net capital we take certain percentage deductions or haircuts against assets held based on factors required by the Commodity Exchange Act to calculate adjusted net capital. GCGL’s net capital and adjusted net capital changes from day to day. As of June 30, 2018, GCGL had net capital of approximately $48.8 million and net capital requirements and haircut charges of $35.8 million. As of June 30, 2018, GAIN Capital Group’s excess net capital was $13.0 million. We believe that we currently have sufficient capital to satisfy these on-going minimum net capital requirements. In accordance with CFTC regulation 1.12 and NFA Financial Requirements Section 1, a 20.0% decrease in GCGL’s net capital and a 30.0% decrease in excess net capital due to a planned equity withdrawal requires regulatory notification and/or approval.

GAIN Capital Securities, Inc. (“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 $0.1 million. GCSI must also maintain a ratio of aggregate indebtedness (as defined) to net capital of not more than 15 to 1. At June 30, 2018, GCSI maintained $0.3 million more than the minimum required regulatory capital for a total of 4.0 times the required capital.

GCUK is regulated by the FCA as a full scope €730k IFPRU Investment Firm. GCUK is required to maintain the greater of approximately $0.9 million (€730,000) or the Financial Resources Requirement, which is calculated as the sum of the firm’s operational, credit, counterparty, concentration and market risk. At June 30, 2018, GCUK maintained $134.8 million more than the minimum required regulatory capital for a total of 3.0 times the required capital.

GAIN Capital Japan Co., Ltd. (“GC Japan”) is a registered Type I financial instruments business firm regulated by the Japan Financial Services Agency (“FSA”) 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 140%, which is derived by dividing Net Capital (as defined in Law No. 25) by the sum of GC Japan’s market, counterparty credit risk and operational risk. At June 30, 2018, GC Japan maintained $7.9 million more than the minimum required regulatory capital for a total of 5.9 times the required capital.

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GAIN Capital Australia, Pty. Ltd. (“GCAU”) is regulated under the laws of Australia, including the Corporations Act 2001 (Commonwealth of Australia). GCAU holds an Australian Financial Services License that has been issued by ASIC. GCAU is required to maintain a minimum capital requirement of $0.7 million (1.0 million AUD). The regulatory capital held is required to be in excess of 110% of its requirements at all times. At June 30, 2018, GCAU maintained $4.7 million more than the minimum required regulatory capital for a total of 7.7 times the required capital.

GAIN Capital-Forex.com Hong Kong, Ltd. (“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 $1.9 million. At June 30, 2018, GCHK maintained $1.5 million more than the minimum required regulatory capital for a total of 1.8 times the required capital.

GAIN Global Markets, Inc. (“GGMI”), the Company’s Cayman Island subsidiary, is a registered securities arranger and market maker 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 the financial resources requirement which is the sum of the Base Requirement, counterparty and position risk requirement, or $0.4 million. At June 30, 2018, GGMI maintained $1.6 million more than the minimum required regulatory capital for a total of 5.0 times the required capital.

GAIN Capital-Forex.com Canada, Ltd. (“GCCA”) is a Dealer Member of the Investment Industry Regulatory Organization of Canada (“IIROC”) and regulated under the laws of Canada, including the Canadian Investor Protection Fund. In Canada, the securities industry is governed by provincial or territorial legislation, and there is no national regulator. Local legislation differs from province to province and territory to territory, but generally requires that forex dealing representatives register with applicable regulators and self-regulatory organizations in order to offer forex and/or CFD products to retail clients. GCCA’s principal provincial regulator is the Ontario Securities Commission, or OSC. GCCA is required to maintain risk-adjusted capital in excess of the minimum capital requirement. At June 30, 2018, GCCA maintained $1.2 million more than the minimum required regulatory capital for a total of 7.0 times the required capital.

GAIN Capital Singapore Pte., Ltd. (“GCS”) is registered by the Monetary Authority of Singapore (“MAS”) and operates as an approved holder of Capital Market Services License. GCS is subject to the requirements of MAS and pursuant to the Securities and Futures Act (Cap 289). Under these rules GCS is required to maintain a minimum base capital of approximately $0.3 million (1.0 million SGD) and Financial Resources in excess of 120% of the total risk requirements at all times, which is calculated as the sum of operational, counterparty, large exposure and market risk. At June 30, 2018, GCS maintained $7.1 million more than the required minimum regulatory capital for a total of 24.7 times the required capital.

Trade Facts, Ltd. (“Trade Facts”) is regulated by the FCA as a BIPRU Limited License Firm. Trade Facts is required to maintain a base financial resources requirement of approximately $0.1 million (€0.05 million) and a capital requirement of the higher of either credit risk plus market risk or a fixed overhead requirement. At June 30, 2018, Trade Facts maintained $2.9 million more than the minimum required regulatory capital for a total of 5.8 times the required capital.

GAA is a registered Introducing Broker and is subject to the CFTC Net Capital Rule (Rule 1.17). Under applicable provisions of these rules, GAA is required to maintain adjusted net capital of less than $0.1 million. At June 30, 2018, GAA maintained $1.4 million more than the minimum required regulatory capital.

GAIN Capital Payments Ltd. is regulated in the U.K. by the FCA and is authorized to carry out payment services under the Payment Services Regulations 2009. The regulatory capital must be the greater of either (i) $0.1 million (€0.1 million) or (ii) requirements determined by the fixed overhead requirement. At June 30, 2018, GAIN Capital Payments Ltd. maintained $0.3 million more than the minimum required regulatory capital.

GAIN GTX, LLC (“GTX SEF”) is a registered swap execution facility with the CFTC and is subject to the requirements under CFTC regulations 37.1300-1306. Under applicable provisions of these regulations, GTX SEF is required to maintain financial resources of more than or equal to the total of its operating costs for a period of at least one year financial resources requirements, calculated on a rolling basis. At June 30, 2018, GTX SEF maintained $0.2 million more than the minimum required regulatory capital for a total of 1.3 times the required capital.

Effective from 2016, the FCA began transitioning in additional capital requirements in the form of a conservation buffer and a countercyclical capital buffer as set out in Capital Requirements Directive, or CRD IV, Article 160 Transitional Provisions for Capital Buffers. The transitional period began on January 1, 2016 and the minimum common equity tier 1 capital ratio requirement, currently at 6.375% for the year of 2018, will increase to 7.0% as of January 1, 2019. Given the nature of our UK-regulated firms’ activities, the effect of the countercyclical buffer is expected to be negligible.

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In July 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act. A number of significant provisions contained in the law affect, or will affect once implementing regulations are adopted by the appropriate federal agencies, our business. Among other things, the Dodd-Frank Act provides for additional regulation of swaps and security-based swaps, including some types of foreign exchange and metals derivatives in which we engage. The Dodd-Frank Act requires the registration of swap dealers with the CFTC and imposes significant regulatory requirements on swap dealers and swap execution facilities. Effective February 27, 2013, GAIN GTX, LLC became provisionally registered with the CFTC and NFA as a swap dealer. Effective June 2016, GTX SEF, LLC became permanently registered with the CFTC as a swap execution facility, replacing the temporary registration previously granted in April 2014. Certain of our other subsidiaries may be required to register, or may register voluntarily, as swap dealers and/or swap execution facilities.

Swap dealers and swap execution facilities are subject to a comprehensive regulatory regime with new obligations for the swaps activities for which they are registered, including adherence to risk management policies, supervisory procedures, trade record and real time reporting requirements as well as proposed rules for new minimum capital requirements. GAIN GTX, LLC and GTX SEF, LLC have faced, and may continue to face, increased costs due to the registration and regulatory requirements listed above, as may any other of our subsidiaries that register as a swap dealer and/or swap execution facility. In particular, the CFTC has proposed rules that would require a swap-dealer to maintain regulatory capital of at least $20.0 million. Compliance with this or other swap-related regulatory capital requirements may require us to devote more capital to our GTX business or otherwise restructure our operations, such as by combining our GTX business with other regulated subsidiaries that must also satisfy regulatory capital requirements. The increased costs associated with compliance, and the changes that will be required in our OTC and clearing businesses, may adversely impact our results of operations, cash flows or financial condition.

Operating Cash

We are required to maintain cash on deposit with our liquidity providers in order to conduct our hedging activities. As of June 30, 2018, we posted $52.3 million in cash with liquidity providers. As of June 30, 2018, our total client assets were $920.4 million compared to $978.8 million as of December 31, 2017, a decrease of $58.4 million. Total client assets represent amounts due to clients, including deposits and unrealized gains or losses arising from open positions.

The table set forth below provides a measure of our available liquidity as of June 30, 2018 and as of December 31, 2017. We believe our reporting of available liquidity assists investors in evaluating our performance. We use this non-GAAP measure to evaluate our ability to continue to fund growth in our business (amounts in millions):

	June 30, 2018			December 31, 2017
Cash and cash equivalents	$	360.3		$	209.7
Receivables from brokers	52.3			78.5
Revolving credit facility (undrawn)	50.0			50.0
Net operating cash	462.6			338.2
Less: Minimum regulatory requirements	(108.9		)	(112.9		)
Less: Payables to brokers	(3.0		)	(2.8		)
Less: Convertible senior notes due 2018	(6.4		)	(6.4		)
Liquidity (1)	$	344.3		$	216.1

(1) Our Convertible Senior Notes due 2020 and 2022 are excluded given their long-dated maturity.

The increase in our liquidity for the six months ended June 30, 2018 was primarily due to sale proceeds from the GTX ECN business of approximately $96.8 million, net of transaction-related expenses and fees, net income from continuing operations of $18.7 million, a decrease in minimum regulatory requirements of $4.0 million and changes in foreign currency, partially offset by the purchase of treasury stock of $8.3 million.

Convertible Senior Notes

On November27, 2013, we issued $80.0 million aggregate principal amount of our 4.125% Convertible Senior Notes due 2018 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the note offering were approximately $77.2 million, after deducting discounts to the initial purchasers and estimated offering expenses payable by the Company. We used a portion of the net proceeds of the offering of our 5.00%

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Convertible Senior Notes due 2022 to repurchase $71.8 million in principal amount of our 4.125% Convertible Senior Notes due 2018.

The notes bear interest at a fixed rate of 4.125% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2014. The notes are convertible into cash, shares of our common stock, or a combination thereof, at our election. The notes will mature on December 1, 2018, unless earlier converted, redeemed or repurchased.

On April 1, 2015, as part of the consideration for our acquisition of City Index, we issued $60.0 million aggregate principal amount of our 4.125% Convertible Senior Notes due 2020 to City Index Group Limited. These notes bear interest at a fixed rate of 4.125% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2015. The notes are convertible into cash, shares of our common stock, or a combination thereof, at our election, subject to certain limitations. The notes will mature on April 1, 2020, unless earlier converted, redeemed or repurchased. We may not redeem the notes until the two year period prior to the maturity date of the notes.

On August 22, 2017, we issued $92.0 million aggregate principal amount of our 5.00% Convertible Senior Notes due 2022, which includes the exercise in full of the over-allotment option granted to the initial purchasers of the notes, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes bear interest at a fixed rate of 5.00% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018. The notes are convertible into cash, shares of our common stock, or a combination thereof, at our election. The notes will mature on August 15, 2022, unless earlier converted, redeemed or repurchased. We may not redeem the notes prior to August 15, 2020. The net proceeds from the offering of these notes were approximately $88.4 million, after deducting discounts to the initial purchasers and estimated offering expenses payable by the Company.

An entity must separately account for the liability and equity components of convertible debt instruments whose conversion may be settled entirely or partially in cash in a manner that reflects the issuer’s economic interest cost for non-convertible debt. The liability component of the notes is initially valued at the fair value of a similar debt instrument that does not have an associated equity component and is reflected as a liability in our Condensed Consolidated Balance Sheets in an amount equal to the fair value, which, as of June 30, 2018 and December 31, 2017, was $135.3 million and $132.2 million, respectively. The equity component of the notes is included in the additional paid-in capital section of our shareholders’ equity on our Condensed Consolidated Balance Sheets, and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component. The equity component, as of June 30, 2018 and December 31, 2017, for our convertible senior notes was $38.6 million and $38.6 million, respectively. This original issue discount is amortized to non-cash interest expense over the term of the notes, and, as a result, we record a greater amount of interest expense in current periods. Accordingly, we reported lower net income in our financial results than would have been recorded had we reflected only cash interest expense in our Consolidated Income Statement because GAAP requires the interest expense associated with the notes to include both the current period’s amortization of the original issue discount and the notes’ cash coupon interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the notes.

In addition, under certain circumstances, convertible debt instruments whose conversion may be settled entirely or partly in cash (such as our 4.125% Convertible Senior Notes due 2018, 4.125% Convertible Senior Notes due 2020, and 5.00% Convertible Senior Notes due 2022) are currently accounted for using the treasury stock method. Under this method, the shares issuable upon conversion of the notes are not included in the calculation of diluted earnings per share unless the conversion value of the notes exceeds their principal amount at the end of the relevant reporting period. If the conversion value exceeds their principal amount, then, for diluted earnings per share purposes, the notes are accounted for as if the number of shares of common stock that would be necessary to settle the excess, if we elected to settle the excess in shares, were issued. The accounting standards in the future may not continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares, if any, issuable upon conversion of the notes, then our diluted earnings (loss) per share could be adversely affected.

Credit Facility

On August 3, 2017, the Company entered into a Credit Agreement, dated as of August 2, 2017, for a three year U.S. $50.0 million senior secured first lien revolving credit facility that matures in August 2020. Upon request of the Company, the credit facility may be increased by up to $25.0 million, with a minimum increase of $5.0 million. The credit facility contains covenants that are customary for an issuer with senior debt. As of June 30, 2018, we were in compliance with the covenants for our credit facility. The Company will pay a quarterly commitment fee based on the undrawn portion of the facility and interest on amounts drawn.

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As of June 30, 2018, there were no amounts outstanding under the revolving line of credit.

Cash Flow

The following table sets forth a summary of our cash flow for the six months ended June 30, 2018 and the six months ended June 30, 2017 (amounts in thousands):

	For the Six Months Ended June 30,
	2018			2017
Net cash provided by/(used in) operating activities	$	12,019		$	(35,995	)
Net cash provided by/(used in) investing activities	88,028			(17,142		)
Net cash used in financing activities	(12,992		)	(15,717		)
Effect of exchange rate changes on cash and cash equivalents	5,107			29,091
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	$	92,162		$	(39,763	)

The primary drivers of our cash flow provided by/(used for) operating activities are net income, adjusted for non-cash charges, such as depreciation and amortization, and amounts posted as collateral with liquidity providers.

Our largest operating expenses are employee compensation and benefits, marketing and referral fees. Employee compensation and benefits include salaries, bonuses and other employee related costs, as well as commissions paid to certain sales personnel. Marketing expenses consist primarily of selling and promotional costs to support our retail, institutional and futures brands. Referral fees consist primarily of payments made to our white label partners and introducing brokers.

Unrealized gains and losses on cash positions revalued at prevailing foreign currency exchange rates are included in trading revenue but have no direct impact on cash flow from operations. Gains and losses become realized and impact cash flow from operations when customer transactions are liquidated. To some extent, the amount of net deposits made by our customers in any given period is influenced by the impact of unrealized gains and losses on our customer balances, such that customers may be required to post additional funds to maintain open positions or may choose to withdraw excess funds on open positions.

Operating Activities

Cash provided by operating activities was $12.0 million for the six months ended June 30, 2018, compared to cash used for operating activities of $36.0 million for the six months ended June 30, 2017. For the six months ended June 30, 2018, cash receivable from brokers decreased by $25.7 million compared to an increase of $20.0 million in the six months ended June 30, 2017. In addition, net income from continuing operations contributed$18.7 million of operating cash for the six months ended June 30, 2018 compared to a reduction from the net loss of $4.9 million for the six months ended June 30, 2017.

Investing Activities

Cash provided by investing activities was $88.0 million for the six months ended June 30, 2018 compared to cash used for investing activities of $17.1 million for the six months ended June 30, 2017. The increase in cash provided by investing activities was primarily due to sale of the GTX business in the six months ended June 30, 2018.

Capital expenditures were $8.7 million for the six months ended June 30, 2018 compared to $10.2 million for the six months ended June 30, 2017. The decrease in capital expenditures is primarily the result of our ongoing efforts to migrate customers onto a single retail trading platform, leading to a reduction in development and other costs associated with maintaining multiple trading platforms.

Financing Activities

Cash used for financing activities was $13.0 million for the six months ended June 30, 2018 compared to cash used for financing activities of $15.7 million for the six months ended June 30, 2017. The reduction in cash used for financing activities was primarily due to the decrease in distributions to non-controlling interest holders and a decrease in the purchase of treasury stock for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

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Contractual Obligations

For the six months ended June 30, 2018, there were no significant changes to our vendor or operating lease obligations from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017.

Off-Balance Sheet Arrangements

At June 30, 2018 and December 31, 2017, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

For the six months ended June 30, 2018, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will impact our Condensed Consolidated Financial Statements. Our net interest revenue is directly affected by the short-term interest rates we earn from re-investing our cash and our customers’ cash. As a result, a portion of our interest income will decline if interest rates fall. Short-term interest rates are highly sensitive to factors that are beyond our control, including general economic conditions and the policies of various governmental and regulatory authorities. Our cash and cash equivalents and customer cash and cash equivalents are held in cash and cash equivalents including cash at banks, deposits at liquidity providers, in money market funds that invest in short-term U.S. government securities, and in United States and Canadian Imperial Bank of Commerce treasury bills. The interest rates earned on these deposits and investments affects our interest revenue. We estimate that as of June 30, 2018, an immediate 100 basis point increase in short-term interest rates would result in approximately $10.6 million more in annual pretax income.

Foreign Currency Risk

Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the value of our earnings and assets. Entities that have assets and liabilities denominated in currencies other than the primary economic environment in which the entity operates are subject to re-translation.

We monitor our exchange rate exposure and may make settlements to reduce our exposure. We do not take proprietary directional market positions.

Virtually all sales and related operating costs are denominated in the currency of the local country and translated into USD for consolidated reporting purposes. Although the majority of the assets and liabilities of these subsidiaries are denominated in the functional currency of the subsidiary, they may also hold assets or liabilities denominated in other currencies. These items may give rise to foreign currency transaction gains and losses. As a result, our results of operations and financial position are exposed to changing currency exchange rates. We may consider entering into hedging transactions to mitigate our exposure to foreign currency exchange rates. These hedging transactions may not be successful.

Credit Risk

Our trading operations require a commitment of our capital and involve risk of loss because of the potential that a customer’s losses may exceed the amount of cash in their account. While we are able to closely monitor each customer’s exposure, it does not guarantee our ability to eliminate negative customer account balances prior to an adverse currency price change or other market events, such as the extreme volatility in the Swiss franc following the SNB market event in January 2015. Changes in market conditions or unforeseen extreme market events could result in our customers experiencing losses in excess of the funds they have deposited with us. In such an event, we may not be able to recover the negative client equity from our customers, which could materially adversely affect our results of operations. In addition, if we cannot recover funds from our customers, we may nonetheless be required to fund positions we hold with our liquidity providers or other third parties and, in such an event, our available funds may not be sufficient to meet our obligations to these third parties, which could materially adversely affect our business, financial condition, results of operations and cash flows.

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In order to help mitigate this risk, we require that each trade must be collateralized in accordance with our margin policies described below. Each customer is required to have minimum funds in their account for opening positions, which we refer to as the initial margin, and for maintaining positions, which we refer to as maintenance margin, depending on the product being traded. Margin requirements are expressed as a percentage of the customer’s total position in that product, and the customer’s total margin requirement is based on the aggregate margin requirement across all of the positions that a customer holds at any one moment in time. Each net position in a particular product is margined separately. Accordingly, we do not net across different positions, thereby following a more conservative margin policy. Our systems automatically monitor each customer’s margin requirements in real time, and we confirm that each of our customers has sufficient cash collateral in his or her account before we execute their trades. We may also adjust required customer margins (both initial and maintenance) from time to time based on our monitoring of various factors, including volatility and liquidity. If at any point in time a customer’s trading position does not comply with the applicable margin requirement, the position may be automatically liquidated, partially or entirely, in accordance with our margin policies and procedures. This policy protects both us and the customer. Our margin and liquidation policies are set forth in our customer agreements.

We are also exposed to potential credit risk relating to the counterparties with which we hedge our trades and the financial institutions with which we deposit cash. We mitigate these risks by transacting with several of the largest financial institutions in the world, with limits on our exposure to any single financial institution. In the event that our access to one or more financial institutions becomes limited, our ability to hedge may be impaired.

Market Risk

We are exposed to market risk in connection with our retail trading activities. Because we act as counterparty to our retail customers’ transactions, we are exposed to risk on each trade that the market price of our position will decline. Accordingly, accurate and efficient management of our net exposure is a high priority, and as such we have developed both automated and manual policies and procedures to manage our exposure. These risk-management policies and procedures are established and reviewed regularly by the Risk Committee of our Board of Directors. Our risk-management policies require quantitative analyses by instrument, as well as assessment of a range of market inputs, including trade size, dealing rate, customer margin and market liquidity. Our risk-management procedures require our team of senior traders to monitor risk exposure on a continuous basis and update senior management both informally over the course of the trading day and formally through intraday and end of day reporting. A key component of our approach to managing market risk is that we do not initiate market positions for our own account in anticipation of future movements in the relative prices of products we offer. To facilitate our risk-management activities, we maintain levels of capital in excess of those currently required under applicable regulations. As of June 30, 2018, we maintained capital levels of $285.8 million, which represented approximately 2.6 times the capital we were required to hold under applicable regulations.

Cash Liquidity Risk

In normal conditions, our market making business and related services is self-financing as we generate sufficient cash flows to pay our expenses as they become due. As a result, we generally do not face the risk that we will be unable to raise cash quickly enough to meet our payment obligations as they arise. Our cash flows, however, are influenced by customer trading volume, currency volatility and liquidity in markets in which we have positions. These factors are directly impacted by domestic and international market and economic conditions that are beyond our control. In an effort to manage this risk, we have secured a substantial liquidity pool by establishing trading relationships with several financial institutions. These relationships provide us with sufficient access to liquidity to allow us to consistently execute significant trades in varying market conditions at the notional amounts our customers desire by providing us with as much as 50:1 leverage on the notional amounts of our available collateral we have on deposit with such financial institutions. We generally maintain collateral on deposit, which includes our funds and our customers’ funds, with our liquidity providers. Collateral on deposit ranged from $92.3 million to $135.7 million in the aggregate during the six months ended June 30, 2018.

In addition, our trading operations involve the risk of losses due to the potential failure of our customers to perform their obligations under the transactions we enter into with them, which increases our exposure to cash liquidity risk. To reduce this risk, our margin policy requires that we mark our customers’ accounts to market each time the market price of a position in their portfolio changes and provides for automatic liquidation of positions, as described above.

Operational Risk

Our operations are subject to broad and various risks resulting from technological interruptions, failures or capacity constraints in addition to risks involving human error or misconduct. Regarding technological risks, we are heavily dependent on the capacity and reliability of the computer and communications systems supporting our operations. Our computer infrastructure is potentially vulnerable to physical or electronic computer break-ins, viruses and similar disruptive problems and security

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breaches. We have established a program to monitor our computer systems, platforms and related technologies and to promptly address issues that arise. We have also established disaster recovery facilities in strategic locations to ensure that we can continue to operate with limited interruptions in the event that our primary systems are damaged. As with our technological systems, we have established policies and procedures designed to monitor and prevent both human errors, such as clerical mistakes or incorrectly placed trades, as well as human misconduct, such as unauthorized trading, fraud or negligence. In addition, we seek to mitigate the impact of any operational issues by maintaining insurance coverage for various contingencies.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate, to allow timely decisions regarding required disclosure.

Management of the Company, with the participation of its CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on their evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective.

(b) Changes in Internal Control over Financial Reporting

During the second quarter of 2018, the Company implemented a new cloud enterprise resource planning (ERP) solution, including a new general ledger and chart of accounts, consolidation process, and reporting tools. The upgraded ERP system represents a systems improvement initiative designed to provide more effective management of our business operations and improve management reporting. This initiative was not undertaken in response to any identified deficiency in the Company's internal control over financial reporting. The Company completed testing of the implemented system prior to its launch, continues to monitor impacted financial and business processes and believes that an effective control environment has been maintained post-implementation.

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), other than the implementation of a new ERP system, during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For the six months ended June 30, 2018, we incorporate herein by reference the discussions set forth under “Legal Proceedings” in Part I, Item 3 of our Form 10-K for the year ended December 31, 2017.

ITEM 1A. RISK FACTORS

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 describes the various important risk factors facing our business in Part I, Item 1A under the heading “Risk Factors.” There have been no material changes to the risk factors disclosed in that section of our Annual Report on Form 10-K, which is incorporated herein by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sales of Equity Securities

None.

(b) Purchase of Equity Securities by the Issuer

The following table presents information regarding our purchases of common stock in the six months ended June 30, 2018:

Period(1)	Total Number of Shares Purchased(1)	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(1)(2)
January 1, 2018-January 31, 2018	124,337	$	8.04	124,337	$	12,264,759
February 1, 2018-February 28, 2018	225,497	$	6.87	225,497	$	10,710,340
March 1, 2018-March 31, 2018	230,230	$	7.06	230,230	$	9,080,835
April 1, 2018-April 30, 2018	190,761	$	7.60	190,761	$	32,627,108
May 1, 2018-May 31, 2018	163,137	$	8.12	163,137	$	31,298,959
June 1, 2018-June 30, 2018	164,918	$	7.88	164,918	$	29,995,746

(1) On May 16, 2011, the Company announced that its Board of Directors approved a share repurchase plan, which authorized the expenditure of up to $10.0 million for the purchase of the Company’s common stock. On May 6, 2013, the Company announced that the Board of Directors approved to increase the total amount available for the purchase of the Company’s common stock by $15.0 million. On May 3, 2016, the Company’s Board of Directors approved to increase the total amount available for the purchase of the Company’s common stock by an additional $15.0 million, including amounts allocable to certain prior purchases made in March, April and May 2016. On November 3, 2016, the Company announced that its Board of Directors had increased the total amount available for the repurchase of the Company’s common stock under the Company’s share repurchase plan to $30.0 million. On August 14, 2017, in connection and concurrent with the offering of the Company's 5.00% Convertible Senior Notes due in 2022, the Board of Directors approved the expenditure of up to $15.0 million for the purchase of the Company's common stock, of which $14.5 million was repurchased. On April 24, 2018, the Board of Directors approved an increase in the total amount of available cash for the purchase of the Company's common stock of $25 million.

(2) Transaction fees related to the share purchases are deducted from the total remaining allowable expenditure amount.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1	Asset Purchase Agreement, dated as of May 29, 2018, between 360tGTX Inc. and GAIN Capital Holdings, Inc. *
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.*
101.INS	XBRL Instance
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.DEF	XBRL Taxonomy Extension Definition
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GAIN Capital Holding, Inc.
Date: August 9, 2018	/s/ Glenn H. Stevens
	Glenn H. Stevens
	President, Chief Executive Officer and Director (Principal Executive Officer)
Date: August 9, 2018	/s/ Nigel Rose
	Nigel Rose
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

EXHIBIT 10.1

EXECUTION VERSION

ASSET PURCHASE AGREEMENTdated as ofMay 29, 2018between360TGTX Inc., andGAIN CAPITAL HOLDINGS, INC.

TABLE OF CONTENTS

PAGE

ARTICLE 1DEFINITIONS

Section 1.01.Definitions    1

Section 1.02.Other Definitional and Interpretative Provisions    9

ARTICLE 2PURCHASE AND SALE

Section 2.01.Purchase and Sale    9

Section 2.02.Excluded Assets    10

Section 2.03.Assumed Liabilities    11

Section 2.04.Excluded Liabilities    12

Section 2.05.Assignment of Contracts and Rights    12

Section 2.06.Purchase Price    13

Section 2.07.Closing    13

Section 2.08.Closing Statement    14

Section 2.09.Adjustment of Purchase Price    16

Section 2.10.Withholding    17

ARTICLE 3REPRESENTATIONS AND WARRANTIES OF SELLER

Section 3.01.Corporate Existence and Power    17

Section 3.02.Governmental Authorization    17

Section 3.03.Noncontravention    18

Section 3.04.Corporate Authorization    18

Section 3.05.Financial Statements    18

Section 3.06.Absence of Certain Changes    18

Section 3.07.No Undisclosed Material Liabilities    19

Section 3.08.Material Contracts    19

Section 3.09.Litigation    21

Section 3.10.Compliance with Laws and Court Orders    22

Section 3.11.Permits    22

Section 3.12.Properties    22

Section 3.13.Intellectual Property    23

Section 3.14.Insurance Coverage    25

Section 3.15.Finders’ Fees    26

Section 3.16.Employees    26

Section 3.17.Business Benefit Plans    26

Section 3.18.Tax    27

Section 3.19.Sanctions    28

Section 3.20.Anti-corruption    28

Section 3.21.Anti-Money Laundering Laws    28

ARTICLE 4REPRESENTATIONS AND WARRANTIES OF BUYER

Section 4.01.Corporate Existence and Power    29

Section 4.02.Corporate Authorization    29

Section 4.03.Governmental Authorization    29

Section 4.04.Noncontravention    29

Section 4.05.Litigation    29

Section 4.06.Finders’ Fees    30

Section 4.07.Financing    30

Section 4.08.Inspections; No Other Representations    30

ARTICLE 5COVENANTS OF SELLER

Section 5.01.Conduct of the Business    31

Section 5.02.Access to Information    32

Section 5.03.Non-Competition    33

Section 5.04.Non-Solicitation of Employees    34

Section 5.05.Trade Secret Transfer and Support    34

Section 5.06.Certain FX Transactions and Non-Deliverable Metals Trades    35

Section 5.07.Customer Migration    35

ARTICLE 6COVENANTS OF BUYER

Section 6.01.Access    35

Section 6.02.Contact with Customers and Suppliers    36

Section 6.03.Employees and Employee Benefits    36

Section 6.04.Seller Marks    39

ARTICLE 7COVENANTS OF BUYER AND SELLER

Section 7.01.Reasonable Best Efforts; Further Assurances    39

Section 7.02.Certain Filings    40

Section 7.03.Public Announcements    40

Section 7.04.Tax Covenants    40

Section 7.05.Confidentiality    42

Section 7.06.Wrong Pockets    43

Section 7.07.Mitigation    43

ARTICLE 8CONDITIONS TO CLOSING

Section 8.01.Conditions to Obligations of Buyer and Seller    44

Section 8.02.Conditions to Obligation of Buyer    44

Section 8.03.Conditions to Obligation of Seller    45

ARTICLE 9SURVIVAL; INDEMNIFICATION

Section 9.01.Survival    45

Section 9.02.Indemnification by Seller; Indemnification by Buyer    46

Section 9.03.Third Party Claim Procedures    47

Section 9.04.Direct Claim Procedures    48

Section 9.05.Calculation of Damages    49

Section 9.06.Assignment of Claims    50

Section 9.07.Exclusivity    50

Section 9.08.R&W Insurance Policy    50

Section 9.09.Purchase Price Adjustment and Allocation of Payments    51

ARTICLE 10TERMINATION

Section 10.01.Grounds for Termination    51

Section 10.02.Effect of Termination    52

ARTICLE 11MISCELLANEOUS

Section 11.01.Notices    52

Section 11.02.Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege    53

Section 11.03.Release    53

Section 11.04.Amendments and Waivers    54

Section 11.05.Transfer Taxes    54

Section 11.06.Expenses    54

Section 11.07.Successors and Assigns    54

Section 11.08.Governing Law    54

Section 11.09.Jurisdiction    54

Section 11.10.WAIVER OF JURY TRIAL    55

Section 11.11.Counterparts; Effectiveness; Third Party Beneficiaries    55

Section 11.12.Entire Agreement    55

Section 11.13.Bulk Sales Laws    55

Section 11.14.Severability    55

Section 11.15.Disclosure Schedules    56

Section 11.16.Guaranty    56

Section 11.17.Specific Performance    57

Exhibits

Exhibit A    Form of Master Services Agreement

Exhibit B    Form of GTX User Agreement

Exhibit C    Form of Assignment and Assumption Agreement

Exhibit D    Form of Transition Services Agreement

Exhibit E    Accounting Policies

Exhibit F    Balance Sheet

Exhibit G    Seller’s Press Release

Exhibit H    Buyer’s Press Release

**Note: All exhibits and schedules to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibits or schedules will be furnished to the Securities and Exchange Commission upon request.

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT (this “Agreement”) dated as of May 29, 2018, by and among 360TGTX Inc., a Delaware corporation (“Buyer”), and GAIN Capital Holdings, Inc., a Delaware corporation (the “Seller”).

W I T N E S S E T H :

WHEREAS, Seller is the indirect owner of 100% of the issued and outstanding equity of GTX Bermuda Ltd., an exempted company incorporated in Bermuda with limited liability (“Bermuda Co”), Gain GTX Singapore Pte. Ltd., a Singapore private limited company (“Singapore Co”) and GTX (Switzerland) GmbH, a Swiss limited liability company (“Switzerland Co” and, together with Bermuda Co and Singapore Co, the “Companies”);

WHEREAS, Buyer desires to purchase certain assets and assume certain liabilities related to owning, operating, developing, maintaining, marketing, commercializing and licensing the ECN Platform as it is currently operated (the “Business”) from Seller, and Seller desires to sell such assets and transfer such liabilities of the Business to Buyer, upon the terms and subject to the conditions hereinafter set forth;

WHEREAS, concurrently with the execution and delivery of this Agreement, Buyer is acquiring, in connection with the consummation of the transactions contemplated hereby, a representation and warranty insurance policy covering certain representations and warranties set forth in this Agreement (the “R&W Insurance Policy”) and Buyer has provided to Seller a true and complete copy of the form of the binders for the R&W Insurance Policy and will, substantially concurrently with the execution hereof and subject to Section 11.06, pay any applicable deposits required to be paid in connection therewith; and

WHEREAS, substantially contemporaneously with the execution hereof, Buyer is entering into an employment agreement with each person included in the definition of “Key Personnel”.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1DEFINITIONS

Section 1.01. Definitions. (a) As used herein, the following terms have the following meanings:

“Accounting Policies” means the accounting policies, principles, practices and methodologies, with consistent classifications, judgments, elections, inclusions, exclusions and valuation and estimation methodologies as were used in the preparation of the Balance Sheet, in each case as set forth on Exhibit E hereto.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.

“Anti-Corruption Laws” means (a) the Foreign Corrupt Practices Act of 1977 of the United States of America, as amended by the Foreign Corrupt Practices Act Amendments of 1988 and 1998, (b) the UK Bribery Act 2010 and (c) any similar law or regulation relating to bribery or corruption issued, administered, or enforced by any Governmental Authority.

“Anti-Money Laundering Laws” means financial recordkeeping and reporting requirements and the money laundering statutes, the rules and regulations thereunder, and any related or similar rules, regulations or guidelines issued, administered, or enforced by any Governmental Authority in the United States of America or the European Union or its Member States.

“Applicable Law” means, with respect to any Person, any domestic, foreign, transnational or federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.

“Assignment and Assumption Agreement” means an Assignment and Assumption Agreement in substantially the form attached hereto as Exhibit C.

“Balance Sheet” means the unaudited balance sheet of the Business as of the Balance Sheet Date. The Balance Sheet (together with any notes or schedules thereto) is attached hereto as Exhibit F.

“Balance Sheet Date” means March 31, 2018.

“Base Working Capital” means $2,500,000.

“Business Benefit Plan” means any (a) “employee benefit plan” as defined in Section 3(3) of ERISA, whether or not subject thereto, and (b) employment severance, retention, pension, retirement, supplemental retirement, excess benefit, profit sharing, bonus, incentive, stock option, stock purchase, stock ownership, stock appreciation right, deferred compensation, salary continuation, termination, change-of-control, health, life, disability, group insurance, vacation, holiday, fringe benefit or other compensatory or benefit plan, arrangement, policy or agreement, in each case, that is sponsored, maintained or contributed to or required to be maintained or contributed to by Seller or any of its Affiliates for the benefit of one or more Business Employees (other than any plan, program or arrangement sponsored by a Governmental Authority).

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

“Business Employee” means an employee employed primarily in connection with the Business.

“Business Intellectual Property Rights” means all Intellectual Property Rights primarily related to or necessary for the conduct of the Business as currently conducted.

“Closing Date” means the date of the Closing.

“Closing Net Working Capital” means the excess of consolidated current assets over consolidated current liabilities of the Business as of the Closing Date, with those adjustments specified in the Accounting Policies.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and as codified in Section 4980B of the Code and Section 601 et. seq. of ERISA.

“Code” means the United States Internal Revenue Code of 1986.

“Commercially Available Software” means “shrink wrap,” “click through,” “browse wrap” or other commercial off-the-shelf Software that has not been materially modified or customized for any of the Companies, including Open Source Materials.

“Contracts” means all contracts, agreements, leases, subleases, licenses, commitments, sales and purchase orders, participating financial institution agreements, white label and services agreements, user agreements and other instruments, whether written or oral.

“ECN Platform” means the Software platform used or held for use by the Companies in the operation of the Business designed to enable the electronic trading of currencies, commodities and other financial instruments, including all copyrights, data, databases, source code, object code, specifications and documentation related thereto and Trade Secrets embodied therein or otherwise related thereto.

“Effective Time” means 12:01 a.m. Eastern Daylight Time on the Closing Date.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” with respect to an entity means any other entity that, together with such first entity, would be treated as a single employer under Section 414 of the Code.

“GAAP” means generally accepted accounting principles in the United States as of the date hereof, consistently applied.

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

“GTX User Agreement” means the GTX User Agreement in substantially the form attached hereto as Exhibit B.

“Indebtedness” means any amount owed by the Business, or by any Company in respect of the Business, for, without duplication, (a) obligations for borrowed money, (b) obligations evidenced by bonds, notes, debentures or other similar instruments (including a purchase money obligation), (c) obligations for the deferred purchase price or earn out payments related to acquisitions of businesses, (d) capitalized lease obligations recorded in accordance with GAAP, (e) reimbursement obligations relating to letters of credit, bankers’ acceptances, surety or other bonds or similar instruments, in each case to the extent drawn, and (f) any indebtedness or other obligations of any other Person of the type described in the preceding clauses (a) through (e) guaranteed by the Business or by any Company in respect of the Business or secured by a pledge of assets of the Business.

“Intellectual Property Right” means all (a) patents and patent applications, reissuances, divisionals, continuations-in-part, revisions, extensions and reexaminations thereof, (b) trademarks, service marks, trade names, trade dress, and other indicia of source or origin (common law or otherwise), together with all goodwill associated therewith and symbolized thereby, (c) copyrights, works of authorship, databases, data collections and mask works, (d) Trade Secrets, (e) Software, (f) Internet domain names, (g) registrations and applications for registration of any the foregoing (if applicable), and (h) other rights in or arising out of any of the foregoing anywhere in the world.

“Key Personnel” means those individuals listed on Section 1.01 of the Seller Disclosure Schedules.

“Knowledge of Seller”, “Seller’s Knowledge” or any other similar knowledge qualification in this Agreement means, with respect to matters qualified by the knowledge of Seller, the actual knowledge, after reasonable inquiry, of Vincent Sangiovanni, John Miesner, Steve Reilly or Scott Harrington.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance in respect of such property or asset.

“Master Services Agreement” means a Master Services Agreement in substantially the form attached hereto as Exhibit A.

“Material Adverse Effect” means any change, event, circumstance, development or effect that has had or would reasonably be expected to have a material adverse effect on the financial condition, business, assets or results of operations of the Business, taken as a whole, excluding any adverse effect arising out of, resulting from or attributable to a change, event, circumstance, development or effect or series of changes, events, circumstances, developments or effects resulting from (A) changes in GAAP or changes in the regulatory accounting requirements applicable to any industry in which the Business operates, (B) changes in general economic or political conditions, including any change in commodity prices or changes in the credit, debt or capital markets (including changes in interest rates), (C) changes (including changes of Applicable Law) or conditions generally affecting any industry in which the Business operates (except to the extent that the Business is materially disproportionately adversely affected thereby relative to other industry participants), (D) acts of war, sabotage or terrorism, the outbreak or escalation of hostilities, change in geopolitical conditions or natural disasters, (E) the announcement or consummation of the transactions contemplated by this Agreement (including the identity of Buyer), (F) any action taken (or omitted to be taken) at the request of Buyer or consented to in writing by Buyer, (G) any action taken by Seller that is required pursuant to this Agreement, or (H) any failure by the Business to meet any projections or forecasts for any period occurring on or after the date hereof (but, for the avoidance of doubt, not the underlying causes of any such failure).

“Non-DeliverableMetals Trades” means any transaction conducted on the ECN Platform that references a metal and where the transaction by its terms provides for cash settlement.

“Open Source Materials” refers to any Software or other material that is distributed as “free software,” “open source software” or pursuant to any license identified as an open source license by the Open Source Initiative (www.opensource.org) (including but not limited to the GNU General Public License (GPL), Lesser General Public License (LGPL), Mozilla Public License (MPL), Eclipse Public License (EPL), the BSD licenses and the Apache License).

“Patent License Agreements” means the Patent License Agreement between Setec Astronomy Limited and Bermuda Co, dated July 10, 2014 and the Patent License Agreement between Arman Valaquenta and Bermuda Co, dated July 10, 2014.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.

“Personal Information” means information provided, disclosed or accessible to, or generated or collected by, any of the Companies by or at the direction of any customer, employee, contractor or other third party that (i) identifies or can be used to identify an individual (including IP addresses) or (ii) can be used to authenticate an individual (including passwords, PINs, financial account numbers, credit report information and answers to security questions).

“Platform Source Code” means (a) any portion or aspect of any Software code that may be printed out or displayed in human readable form, including related programmer comments and annotations, help text, data, data structures and instructions, or (b) any proprietary information or algorithm contained, embedded or implemented, in any manner, in the ECN Platform.

“Privacy and Security Laws” means all (a) Applicable Laws regarding (i) collecting, accessing, using, disclosing, electronically transmitting, securing, sharing, retaining, destroying, transferring and storing Personal Information, (ii) data breach notification, and (iii) direct marketing by electronic means and the placing and storing of information on user devices and (b) trespass, computer crime and other laws governing unauthorized access to or use of electronic data.

“Pre-Closing Tax Period” means (i) any Tax period ending on or before the Closing Date and (ii) with respect to a Tax period that commences on or before but ends after the Closing Date, the portion of such period up to and including the Closing Date.

“Restricted Party” means a person that is (a) listed on, or 50 percent or more owned (directly or indirectly) by one or more persons listed on any Sanctions List, (b) resident, located in, or organized under the laws of a Sanctioned Country, (c) a government of, or owned or controlled (directly or indirectly) by the government of a Sanctioned Country, or (d) otherwise a target of Sanctions (“target of Sanctions” signifying a person with whom a person subject to the jurisdiction of a Sanctions Authority would be prohibited or restricted by that Sanctions Authority from engaging in trade, business, or other activities).

“Sanctioned Country” means any country or territory that is the target of comprehensive, country-wide or territory-wide Sanctions, which as of the date of this Agreement, comprise the Crimea region of Ukraine, Cuba, Iran, North Korea, and Syria.

“Sanctions” means the economic, financial or trade sanctions laws, regulations, embargoes or restrictive measures, administered, enacted or enforced by any Sanctions Authority.

“Sanctions Authority” means (a) the United States government, (b) the United Nations, (c) the European Union or its Member States or (d) the United Kingdom.

“Sanctions List” means any list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities (each as amended, supplemented or substituted from time to time), including the List of Specially Designated Nationals and Blocked Persons and the Sectoral Sanctions Identifications Lists maintained by OFAC, the Consolidated United Nations Security Council Sanctions List, the Consolidated List of Financial Sanctions Targets maintained by Her Majesty’s Treasury, and the European Union’s lists of restrictive measures against persons and entities issued pursuant to Council Regulation (EC) No. 881/2002 of 27 May 2002, Council Regulation (EC) No. 2580/2001 of 27 December 2001 and Council Common Position 2005/725/CFSP of 17 October 2005.

“Securities Act” means the Securities Act of 1933.

“Software” means all (a) computer software, computer programs, applications, and software implementations of algorithms, models and methodologies, whether in source code, object code or any other form, (b) user and programming interfaces, specifications, utilities, menus, icons, templates, forms, firmware, software engines, platforms, development tools, library functions and compilers, (c) all versions, updates, corrections, enhancements and modifications of the foregoing, and (d) all related documentation, including user manuals and developer notes.

“Specified Claim” means any claim made against Seller, any Company, Buyer, any Affiliate of Seller or Buyer, or any Purchased Asset, arising from any of the following actions or activities, to the extent such actions or activities occurred prior to the Closing Date: (a) any Non-Deliverable Metals Trades, or (b) the use of Open Source Materials in the software used to operate the ECN Platform.

“Support” means technical support provided to Buyer by Seller, its Affiliates or the Key Personnel through e-mail, telephone, on-site training and consultation, and any other support relating to the ECN Platform.

“Tax” means any tax or other like assessment or charge of any kind whatsoever (including withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax (a “Taxing Authority”).

“Trade Secrets” means trade secret rights and corresponding rights in confidential information and other non-public information or data (whether or not patentable), including ideas, formulas, compositions, inventor’s notes, discoveries and improvements, algorithms, know-how, processes and techniques, testing information, research and development information, inventions, blueprints, drawings, specifications, designs, plans, proposals and technical data, business and marketing plans, market surveys, market know-how and customer lists and information.

“Transaction Documents” means this Agreement, the Master Services Agreement, the GTX User Agreement, the Transition Services Agreement and the Assignment and Assumption Agreement.

“Transition Services Agreement” means a Transition Services Agreement in substantially the form attached hereto as Exhibit D.

(a)Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Accounting Firm	2.08
Accounting Referee	7.04
Agreement	Preamble
Allocation Statement	7.04
Apportioned Obligations	7.04
Assumed Liabilities	2.03
Bermuda Co	Recitals
Business Employees	6.03
Buyer	Preamble
Buyer Closing Certificate	8.02
Buyer Obligations	11.16
Claims Notice	9.03
Closing	2.07
Closing Statement	2.08
Commercial Use	6.04
Companies	Preamble
Current Representation	11.02
Cut-Off Date	9.01
Damages	9.02
Deficit Amount	2.09
Designated Person	11.02
e-mail	11.01
Estimated Closing Net Working Capital	2.08
Estimated Purchase Price	2.08
Excluded Assets	2.02
Existing Products	5.03
Excluded Liabilities	2.04
Final Purchase Price	2.09
Forecasts	4.08
Guarantor	11.16
Increase Amount	2.09
Indemnified Party	9.03
Indemnifying Party	9.03
Material Contract	3.08
Non-Transferred Employee	6.03
Objection Notice	2.08
Outside Date	10.01
Permitted Liens	3.12
Post-Closing Representation	11.02
Potential Contributor	9.06
Purchase Price	2.06
Purchased Assets	2.01
Purchased Contracts	2.01
Qualifying Offer	6.03
R&W Insurance Policy	Recitals
Seller	Preamble
Seller Closing Certificate	8.03
Seller Disclosure Schedules	Article 3
Seller Marks	6.04
Singapore Co	Recitals
Switzerland Co	Recitals
Third Party Claim	9.03
Transferred Employee	6.03
WARN Act	6.03
Warranty Breach	9.02

Section 1.02.Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” or to a particular statute or law shall be deemed also to include any and all Applicable Law. References to “or” shall be deemed to refer to “and/or”. For the purposes of this Agreement, any document which is described as being “delivered”, “furnished” or “made available” shall be treated as such if copies of such documents have been put in the dataroom prepared by Seller or otherwise provided to Buyer in electronic or hard copy format.

ARTICLE 2PURCHASE AND SALE

Section 2.01.Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing, Buyer agrees to purchase from Seller and Seller agrees to sell, convey, transfer, assign and deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to Buyer, or to Buyer and/or one or more Affiliates of Buyer designated by Buyer, at the Closing, free and clear of all Liens, other than Permitted Liens, all of the assets, properties and business, of every kind and description, owned, held or used in the conduct of the Business by Seller or any of the Companies as the same shall exist as of the date hereof, including all assets shown on or reflected in the Balance Sheet, and all assets of the Business acquired by Seller or any of the Companies after the date hereof but prior to the Closing, except for the Excluded Assets (the “Purchased Assets”), including the following:

(a)all personal property and interests therein primarily related to the Business;

(b)all Contracts listed on Section 2.01(b) of the Seller Disclosure Schedules (collectively, the “Purchased Contracts”);

(c)all accounts, notes, other receivables and similar rights to receive payments under any Purchased Contract;

(d)all prepaid expenses (other than prepaid Taxes excluded under Section 2.02(e));

(e)all transferable Permits primarily related to the Business;

(f)all Business Intellectual Property Rights, including, for the avoidance of doubt, the ECN Platform and the Platform Source Code;

(g)the Patent License Agreements;

(h)all infrastructure, including servers, racks and cross-connects, related to the ECN Platform and currently used to run the Business in the data centers owned or leased, directly or indirectly, by Seller;

(i)all books, records, files and papers, whether in hard copy or computer format primarily related to the Business;

(j)all goodwill associated with the Business or the Purchased Assets, together with the right to represent to third parties that Buyer is the successor to the Business; and

(k)without limiting the foregoing, the specific assets listed on Section2.01(k) of the Seller Disclosure Schedules.

Section 2.02.Excluded Assets. The following assets and properties of Seller (the “Excluded Assets”) shall be excluded from the Purchased Assets:

(a)any assets relating exclusively to the voice business or SEF business of Seller;

(b)the real property and leases of, and other interests in, real property, in each case together with all buildings, fixtures and improvements erected thereon, listed on Section 2.02(b) of the Seller Disclosure Schedules;

(c)all of Seller’s cash and cash equivalents on hand and in banks;

(d)insurance policies relating to the Business and all claims, credits, causes of action or rights thereunder;

(e)all prepaid amounts and rights to refunds or credits in respect of Taxes arising from ownership or operation of the Purchased Assets in respect of any Pre-Closing Tax Period, in each case, except to the extent reflected in Closing Net Working Capital (as finally determined), and all Tax Returns and books and records relating to Taxes in respect of any Pre-Closing Tax Periods;

(f)all books, records, files and papers, whether in hard copy or computer format, prepared in connection with this Agreement or the transactions contemplated hereby and all minute books and corporate records of Seller and its Affiliates (including the Companies);

(g)all assets relating to the Business Benefit Plans;

(h)the property and assets described on Section 2.02(h) of the Seller Disclosure Schedules; and

(i)all rights of Seller arising under this Agreement or the transactions contemplated hereby.

Section 2.03.Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, Buyer agrees, effective at the time of the Closing, to assume all debts, obligations, contracts and liabilities of Seller or the Companies (whether known or unknown, accrued, absolute, contingent or otherwise) to the extent relating to or arising out of the Purchased Assets or the conduct of the Business (as currently or formerly conducted), except for the Excluded Liabilities (the “Assumed Liabilities”), which, in the case of the Companies include without limitation, and in the case of Seller are limited to, the following:

(a)all liabilities set forth on the Balance Sheet and all liabilities incurred in the ordinary course of business in accordance with Applicable Law thereafter to the extent not satisfied prior to the Closing Date;

(b)all liabilities and obligations of Seller or the Companies arising under the Purchased Contracts;

(c)all Taxes for any Straddle Period that are the responsibility of Buyer under Section 7.04, any Taxes attributable to the Purchased Assets for any Tax period beginning after the Closing Date and any Transfer Taxes apportioned to Buyer under Section 11.05; and

(d)all liabilities or obligations relating to Transferred Employees arising out of events or circumstances occurring on or following the Closing Date, including, for the avoidance of doubt, any and all liabilities, losses, claims, damages, costs or expenses (including attorneys’ fees) arising from or in connection with the Transferred Employees’ service to the Business (other than liabilities in respect of the Business Benefit Plans and other liabilities excluded under Section 6.03).

Section 2.04.Excluded Liabilities. Notwithstanding any provision in this Agreement or any other writing to the contrary, Buyer is assuming only the Assumed Liabilities and is not assuming any other liability or obligation of Seller or any Company of whatever nature, whether currently in existence or arising hereafter. All such other liabilities and obligations shall be retained by and remain obligations and liabilities of Seller or the applicable Company (all such liabilities and obligations not being assumed being herein referred to as the “Excluded Liabilities”). Notwithstanding any provision in this Agreement or any other writing to the contrary, Excluded Liabilities include:

(a)all Taxes for any Straddle Period that are the responsibility of Sellers under Section 7.04, and any Taxes attributable to the Purchased Assets for any Tax period ending on or before the Closing Date;

(b)all Indebtedness;

(c)any liabilities relating exclusively to the voice or SEF business of Seller;

(d)any liabilities with respect to Non-Transferred Employees and Business Benefit Plans;

(e)all liabilities or obligations relating to Transferred Employees arising out of events or circumstances occurring before the Closing Date, including, for the avoidance of doubt, any and all liabilities, losses, claims, damages, costs or expenses (including attorneys’ fees) arising from or in connection with the Transferred Employees’ service to the Business; and

(f)any liability or obligation relating to an Excluded Asset or a Specified Claim.

Section 2.05.Assignment of Contracts and Rights. Notwithstanding anything to the contrary contained herein, this Agreement shall not constitute an agreement to assign any Purchased Asset or any right thereunder if an attempted assignment, without the consent of a third party, would constitute a breach or in any way adversely affect the rights of Buyer or Seller thereunder. Prior to the Closing, Seller shall use commercially reasonable efforts to secure any such consents from third parties and shall in addition provide or cause to be provided all commercially reasonable assistance to Buyer reasonably requested by Buyer to secure any such consents from third parties. If such consent is not obtained despite Seller’s commercially reasonable efforts, Seller and Buyer shall use their respective commercially reasonable efforts to secure such consent as promptly as practicable after the Closing and, if such consent is not obtained despite Seller’s and Buyer’s commercially reasonable efforts, will cooperate in a mutually agreeable arrangement under which Buyer would obtain the benefits and assume the obligations under or of such Purchased Asset or right in accordance with this Agreement.

Section 2.06.Purchase Price. The aggregate amount to be paid hereunder for the Purchased Assets is an amount in cash (the “Purchase Price”) equal to (i) $100,000,000 plus (ii) the amount (which may be positive or negative) equal to (A) Estimated Closing Net Working Capital minus (B) Base Working Capital, subject to adjustment as provided in Section 2.09.

Section 2.07.Closing. The closing (the “Closing”) of the purchase and sale of the Business hereunder shall take place at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York, as soon as possible, but in no event later than three Business Days, after satisfaction of or, to the extent permissible, waiver by the party or parties entitled to the benefit of, the conditions set forth in Article 8 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at the Closing), or at such other time or place as Buyer and Seller may agree; provided that without the mutual consent of the parties hereto, the Closing shall not occur prior to 30 days following the date hereof.

(a)At the Closing, Buyer shall:

(i)deliver to Seller an amount in cash equal to the Estimated Purchase Price in immediately available funds by wire transfer to one or more accounts that have been designated by Seller no later than two Business Days prior to the Closing Date;

(ii)deliver the Buyer Closing Certificate;

(iii)deliver a true, complete and correct copy of the R&W Insurance Policy that is in effect and conforms to the requirements of Section 9.08;

(iv)deliver, or cause to be delivered, to Seller a duly executed counterpart of the Master Services Agreement substantially in the form attached hereto as Exhibit A;

(v)deliver, or cause to be delivered, to Seller a duly executed counterpart of the GTX User Agreement substantially in the form attached hereto as Exhibit B;

(vi)deliver, or cause to be delivered, to Seller a duly executed counterpart of the Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit C;

(vii)deliver, or cause to be delivered, to Seller a duly executed counterpart of the Transition Services Agreement substantially in the form attached hereto as Exhibit D.

(b)At the Closing, Seller shall:

(i)deliver, or cause to be delivered, to Buyer a duly executed counterpart of the Master Services Agreement substantially in the form attached hereto as Exhibit A;

(ii)deliver, or cause to be delivered, to Buyer a duly executed counterpart of the GTX User Agreement substantially in the form attached hereto as Exhibit B;

(iii)deliver, or cause to be delivered, to Buyer a duly executed counterpart of the Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit C;

(iv)deliver, or cause to be delivered, to Buyer a duly executed counterpart of the Transition Services Agreement substantially in the form attached hereto as Exhibit D;

(v)deliver, or cause to be delivered, to Buyer such deeds, bills of sale, endorsements, consents, assignments and other good and sufficient instruments of conveyance and assignment as the parties and their respective counsel shall deem reasonably necessary to vest in Buyer all right, title and interest in, to and under the Purchased Assets, subject to the provisions hereof;

(vi)deliver the Seller Closing Certificate; and

(vii)deliver a DVD, CD ROM or similar electronic storage medium containing the documents primarily related to the Business to which Buyer has been previously granted access in the data room created and maintained by Seller in connection with Buyer’s review of the Business.

Section 2.08.Closing Statement. (a) At least three Business Days prior to the Closing Date, Seller shall cause to be prepared and delivered to Buyer a certificate setting forth Seller’s good faith estimate of (x) Closing Net Working Capital calculated in accordance with the Accounting Policies and the terms of this Agreement (“Estimated Closing Net Working Capital”) and (y) the Purchase Price based thereon, calculated in accordance with Section 2.06 (the “Estimated Purchase Price”). During the period prior to the Closing Date, Seller shall consult with Buyer and provide such information as Buyer may reasonably request with respect to the calculation of Estimated Closing Net Working Capital and the Estimated Purchase Price and Seller shall in good faith consider the objections, if any, of Buyer to the calculation of the Estimated Closing Net Working Capital. For the avoidance of doubt, if any disagreement between Seller and Buyer with any aspect of Estimated Closing Net Working Capital or Estimated Purchase Price cannot be resolved in good faith prior to the Closing, Seller’s calculation shall be used for the purposes of the Closing without prejudice to any of Buyer’s rights pursuant to Section 2.08(b).

(a)As promptly as practicable, but no later than 75 days, after the Closing Date, Buyer shall cause to be prepared and delivered to Seller a certificate including a statement setting forth Buyer’s calculation of the Purchase Price and each component thereof including Closing Net Working Capital (the “Closing Statement”). The Closing Statement and all calculations and determinations contained therein shall be prepared in accordance with the Accounting Policies and the terms of this Agreement. The calculations set forth in the Closing Statement shall not include any purchase accounting or other adjustments arising out of the consummation of the transactions contemplated by this Agreement, shall be based on the facts and circumstances as they existed immediately prior to the Closing and shall exclude any change in circumstance, development or event arising occurring on or after the Closing.

(b)Buyer will (x) provide Seller and its representatives with reasonable access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities and employees of the Business for purposes of their review of the Closing Statement delivered by Buyer pursuant to Section2.08(b) and (y) cooperate with Seller and its representatives in connection with such review, including by providing on a timely basis all other information necessary in connection with such review as is reasonably requested by Seller or its representatives. In the event of a dispute as to whether Buyer has complied with its obligations to provide the access referred to in the preceding sentence, the Accounting Firm shall promptly determine whether Buyer has so complied, and, to the extent that the Accounting Firm determines that Buyer has not so complied, the Accounting Firm is authorized to order Buyer to so comply (and Buyer agrees to comply with any such order promptly). In order to maintain consistency, if any errors or omissions are discovered with respect to any item that affects the amount of consolidated working capital (as adjusted) as of the Balance Sheet Date in connection with the preparation of the Closing Statement or the calculation of Closing Net Working Capital, then all calculations hereunder shall be appropriately adjusted to correct for the effect of such errors or omissions so that the Closing Statement and Closing Net Working Capital reflect only the passage of time with respect to any such item. All of the adjustments to be made in the preceding sentence shall be made in accordance with the Accounting Policies.

(c)Seller and its accountants shall have 60 days after delivery of the documents referred to in the first sentence of Section 2.08(b) to review such documents. If Seller disagrees with any of Buyer’s calculations contained in the Closing Statement delivered pursuant to Section 2.08(b), Seller may, within 60 days after delivery of the Closing Statement, deliver a notice to Buyer setting forth in reasonable detail the particulars of such disagreement (an “Objection Notice”). Any Objection Notice shall specify those items or amounts as to which Seller disagrees and Seller’s calculation of the Purchase Price, and Seller shall be deemed to have agreed with all other items and amounts contained in the Closing Statement delivered pursuant to Section 2.08(b).

(d)If an Objection Notice is duly delivered pursuant to Section 2.08(d), Buyer and Seller shall, during the 15 days following such delivery (as such period may be extended pursuant to a written agreement between Buyer and Seller), use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine the Purchase Price. If Buyer and Seller are unable to reach such agreement during such period, they shall promptly thereafter cause a mutually agreed independent accountant or consultant of nationally recognized standing (who shall not have any material relationship to either Buyer or Seller or any of their respective Affiliates) (the “Accounting Firm”) promptly to review this Agreement and the disputed items or amounts for the purpose of calculating the Purchase Price. In making such calculations, the Accounting Firm shall (i) act as an arbitrator, not as an expert, (ii) consider only those items or amounts in the Closing Statement as to which Seller has disagreed and (iii) not consider or review any settlement (or similar) offers made by Buyer or Seller in connection herewith. The Accounting Firm shall deliver to Buyer and Seller, as promptly as practicable, a report setting forth such calculations, including an explanation for its determination of the amount of each disputed item or amount determined therein. Such report shall be final and binding upon Buyer and Seller. The cost of such review and report shall be borne (i) by Buyer if the Purchase Price is increased from the Purchase Price shown on the Closing Statement, (i) by Seller if the Purchase Price is decreased from the Purchase Price shown on the Closing Statement and (i) otherwise equally by Buyer, on the one hand, and Seller, on the other hand. Neither Buyer nor Seller will have, directly or indirectly, any ex parte communications or meetings with the Accounting Firm concerning matters within the scope of its engagement. Buyer and Seller agree that they will, and agree to cause their respective independent accountants to, cooperate and assist in the preparation of the Closing Statement and in the conduct of any reviews referred to in this Section 2.08, including making available to the extent necessary books, records, work papers and personnel.

(e)For the avoidance of doubt, the calculations to be made pursuant to this Section 2.08 and the adjustments to be made pursuant to Section 2.09 are only meant to reflect changes in the excess of consolidated current assets over consolidated current liabilities of the Business, with those adjustments specified in the Accounting Policies, from the Balance Sheet Date to the date of the Closing Statement. Neither Section 2.08 nor Section 2.09 is intended to be used to adjust for errors or omissions that may be found with respect to the Balance Sheet or any inconsistencies between the Balance Sheet or the Accounting Policies, on the one hand, and GAAP, on the other.

Section 2.09.Adjustment of Purchase Price. (a) If the Estimated Purchase Price exceeds the Final Purchase Price (the amount of such excess, the “Deficit Amount”), then, within five Business Days after the determination of the Final Purchase Price, Seller shall pay to Buyer, by wire transfer of immediately available funds to the accounts specified by Buyer, an amount equal to the Deficit Amount. If the Final Purchase Price exceeds the Estimated Purchase Price (the amount of such excess, the “Increase Amount”), then, within five Business Days after the determination of the Final Purchase Price, Buyer shall pay to Seller, by wire transfer of immediately available funds to the accounts specified by Seller, an amount equal to the Increase Amount. The “Final Purchase Price” means the Purchase Price as shown in Buyer’s calculation delivered pursuant to Section 2.08(b), if no Objection Notice is duly delivered pursuant to Section 2.08(d); or if an Objection Notice is delivered, as agreed by Buyer and Seller pursuant to Section 2.08(e) or in the absence of such agreement, as shown in the Accounting Firm’s calculation delivered pursuant to Section 2.08(e); provided that in no event shall the Final Purchase Price be less than Buyer’s calculation of the Purchase Price delivered pursuant to Section 2.08(b) or more than Seller’s calculation of the Purchase Price delivered pursuant to Section 2.08(d).

(a)If, at any time prior to the determination of the Final Purchase Price, Buyer and Seller (x) agree that any payments will be required to be made pursuant to Section 2.09(a) after the determination of the Final Purchase Price but (y) do not agree as to the amount of such payments, then the undisputed portion of such payments shall be made promptly following such agreement in accordance with Section 2.09(a), as applicable.

Section 2.10.Withholding. Buyer shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts in respect of Taxes as it is required to deduct and withhold with respect to the making of such payment under any provision of U.S. federal, state, local or non-U.S. tax law. If Buyer so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which Buyer made such deduction and withholding. If Buyer reasonably believes that it is obligated under Applicable Law to deduct or withhold any Taxes from the consideration payable to any Person under this Agreement, it shall notify Seller prior to the Closing Date of its intention to withhold, which notice shall include a statement of the amounts it intends to deduct or withhold in respect of making of such payment and the applicable provision of law requiring Buyer to withhold or deduct, in each case as promptly as reasonably practicable after making such determination, and shall reasonably cooperate with Seller to reduce or eliminate such deduction or withholding.

ARTICLE 3REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the disclosure schedules delivered by Seller to Buyer on the date hereof (the “Seller Disclosure Schedules”), Seller represents and warrants to Buyer that:

Section 3.01.Corporate Existence and Power. Seller and each Company is a corporation duly incorporated, validly existing and, to the extent applicable in the relevant jurisdiction, in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which, individually or in the aggregate, would not reasonably be expected to be material to the Business.

Section 3.02.Governmental Authorization. The execution, delivery and performance by Seller of this Agreement or any of the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than any such action or filing as to which the failure to make or obtain would not, individually or in the aggregate, reasonably be expected to be material to the Business.

Section 3.03.Noncontravention. The execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (i) violate the certificate of incorporation or bylaws of Seller or those of the Companies, (i) assuming compliance with the matters referred to in Section 3.02, violate any Applicable Law, require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to the Business to which Seller, any Company or any other subsidiary of Seller transferring a Purchased Asset is entitled under any provision of any Contract or other instrument binding upon Seller, any Company, or any subsidiary of Seller transferring a Purchased Asset, except as set forth on Section 3.03 of the Seller Disclosure Schedules, or (i) result in the creation or imposition of any Lien on any Purchased Asset, except for any Permitted Liens, with such exceptions, in the case of clause (ii), as would not, individually or in the aggregate, reasonably be expected to be material to the Business.

Section 3.04.Corporate Authorization. The execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby are within its corporate powers and have been duly authorized by all necessary corporate action. This Agreement and, upon their execution and delivery by Seller, the other Transaction Documents to which Seller is a party, constitute valid and binding agreements of Seller.

Section 3.05.Financial Statements. The (a) unaudited balance sheet as of December 31, 2017 and the related unaudited statement of income and cash flows for the fiscal year ended December 31, 2017 of the Business and (b) Balance Sheet and the related unaudited interim statement of income and cash flows for the three-month period ended March 31, 2018 of the Business fairly present, in all material respects in conformity with GAAP applied on a consistent basis (except as may be indicated in the notes thereto), the financial position of the Business as of the dates thereof and its results of operations and cash flows for the periods then ended (subject to normal year-end adjustments and the absence of footnote disclosures and other presentation items in the case of any unaudited interim financial statements).

Section 3.06.Absence of Certain Changes. (a) Since the Balance Sheet Date, the Business has been conducted in the ordinary course consistent with past practices (except as expressly contemplated by this Agreement) and there has not been any event, occurrence or development that has had or would reasonably be expected to have a Material Adverse Effect.

(a)From the Balance Sheet Date until the date hereof, there has not been any action taken by Seller or the Companies that, if taken during the period from the date of this Agreement through the Closing Date without Buyer’s consent, would constitute a breach of Section 5.01.

Section 3.07.No Undisclosed Material Liabilities. There are no liabilities of the Business, other than:

(a)liabilities provided for in the Balance Sheet or disclosed in the notes thereto;

(b)liabilities not required under GAAP to be shown on the Balance Sheet, or disclosed in the footnotes thereto, for reasons other than the contingent nature thereof or the difficulty of determining the amount thereof;

(c)liabilities disclosed on Section 3.07(c) of the Seller Disclosure Schedules;

(d)liabilities arising out of contractual obligations contained in any Purchased Contract;

(e)liabilities incurred in connection with this Agreement or the transactions contemplated hereby;

(f)liabilities incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date; and

(g)other liabilities that, individually or in the aggregate, are not material to the Business.

Section 3.08.Material Contracts. (a) Except as set forth on Section 3.08(a) of the Seller Disclosure Schedules, with respect to the Business, neither Seller nor any Company is a party to or bound by:

(i)any lease (whether of real or personal property) providing for annual rentals of $250,000 or more that cannot be terminated on not more than 90 days’ notice without payment by Seller or any Company of any material penalty;

(ii)any Contract for the purchase of materials, supplies, goods, services, equipment or other assets providing for annual payments by Seller or any Company of $250,000 or more that cannot be terminated on not more than 90 days’ notice without payment by Seller or any Company of any material penalty and other than purchase orders in the ordinary course of business;

(iii)any sales, distribution or other similar Contract providing for the sale by Seller or any Company of materials, supplies, goods, services, equipment or other assets that provides for annual payments to Seller or any Company of $400,000 or more other than purchase orders in the ordinary course of business;

(iv)any Contract that grants any Person any exclusive supply, license (other than a license to use any material Business Intellectual Property Right), distribution or other rights;

(v)any material partnership, joint development, joint venture or other similar Contract or arrangement;

(vi)any Contract relating to the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets or otherwise) pursuant to which it has material ongoing obligations;

(vii)any Contract relating to Indebtedness, except any such agreement (A) with an aggregate outstanding principal amount not exceeding $100,000 or (A) entered into subsequent to the date of this Agreement as permitted by Section 5.01;

(viii)any material Contract prohibiting or materially restricting the ability of Seller or any Company to engage, compete, sell, license or provide any product or service in any line of business or with any Person or in any area;

(ix)any white label agreement, participating financial institution agreement, hub agreement or intragroup services agreement related to the Business;

(x)any Contract for capital expenditures in excess of $100,000 in the aggregate;

(xi)any Contract granting a Lien (other than a Permitted Lien) upon any Purchased Asset;

(xii)any Contract, other than a Contract for Commercially Available Software, providing for the purchase by or license to the Companies of any material Software, content, technology or Intellectual Property Rights incorporated (or contemplated by the Companies to be incorporated) into the ECN Platform;

(xiii)any Contract to which Seller or any of the Companies is a party for the development by any Person other than the Companies of technology or Intellectual Property Rights that are material to the ECN Platform;

(xiv)any Contract that requires any of the Companies to maintain interoperability or compatibility of the ECN Platform with any technology, products or services of any other Person;

(xv)any Contract to which any of the Companies is a party (A) with providers of co-location or data hosting services or (B) with application services providers, in each case, whose services are material to the Business;

(xvi)any Contract pursuant to which any of the Companies has agreed to (A) any restriction on the right of such Company to enforce any material Business Intellectual Property Rights, the effect of which is material to the Business or (B) transfer or sell rights in or with respect to any of the material Business Intellectual Property rights;

(xvii)any Contract under which any Company (A) grants any license to use any material Business Intellectual Property Right (other than non-exclusive licenses granted by any Company to customers in the ordinary course of business) or (B) obtains any license to use any material Intellectual Property Right (other than Commercially Available Software);

(xviii)any Contract pursuant to which any of the Companies has agreed or is required to provide any Person with rights in or access to the Platform Source Code (including on a contingent basis), or to place the Platform Source Code in escrow;

(xix)any material Contract with or for the benefit of any Affiliate of Seller, other than any agreements with Business Employees; or

(xx)any other Contract, arrangement or plan not made in the ordinary course of business that is material to the Business.

(b)Except as otherwise disclosed on Section 3.08(b) of the Seller Disclosure Schedules, each Contract, plan, or arrangement required to be disclosed pursuant to this Section (each, a “Material Contract”) (i) is a valid and binding agreement of a Company or Seller, as the case may be, and is in full force and effect, enforceable in accordance with its terms and (i) upon consummation of the transactions contemplated by this Agreement shall continue to be in full force and effect without any penalty, acceleration, termination, repurchase right or other adverse consequence. None of Seller, the Companies or, to the Knowledge of Seller, any other party thereto is in default or breach in any respect under the terms of any such Material Contract, except for any such defaults or breaches that would not, individually or in the aggregate, reasonably be expected to be material to the Business. There are no material disputes pending under any such Contract, plan or arrangement, and neither Seller nor any Company has received notice from any other party to any such Contract, plan or arrangement of such party’s intent to terminate or discontinue or reduce any commitments under any such Contract, plan or arrangement.

Section 3.09.Litigation. At any time since January 1, 2014, no action, suit, investigation or proceeding is or has been pending against, or to the Knowledge of Seller, is or has been, threatened in writing against, Seller or any of the Companies, in either case in respect of the Business, before any arbitrator or any Governmental Authority that is reasonably likely, individually or in the aggregate, to be material to the Business, or that in any manner challenges or seeks to prevent, enjoin, impair, alter or materially delay the transactions contemplated by this Agreement, except as set forth on Section 3.09 of the Seller Disclosure Schedules. Neither Seller nor any of the Companies is a party to or subject to or in default under any unsatisfied judgment applicable to the Purchased Assets, the Assumed Liabilities or the conduct of the Business that is reasonably likely, individually or in the aggregate, to be material to the Business. To the Knowledge of Seller, (i) there are no unasserted claims of the type that would be required to be disclosed in Section 3.09 of the Seller Disclosure Schedules if counsel for the claimant had given written notice to Seller or any of its affiliates that are considered probable of assertion, and (ii) no facts or circumstances exist that would reasonably be expected to give rise to an action, suit, investigation or proceeding relating to or arising out of the Business or the Purchased Assets before any arbitrator or Governmental Authority. As used in the foregoing sentence, “Knowledge of Seller” shall mean the actual knowledge of Vincent Sangiovanni, John Miesner, Steve Reilly or Scott Harrington.

Section 3.10.Compliance with Laws and Court Orders. Since January 1, 2014, Seller and each of the Companies have complied in all material respects with all Applicable Law relating to the Purchased Assets and the conduct of the Business.

Section 3.11.Permits. Except as would not reasonably be expected to be material to the Business, Seller or one of its Affiliates holds all permits, licenses, registrations, consents, exemptions, certificates, approvals or other authorizations of all Governmental Authorities (collectively, “Permits”) necessary for operation of the Business as currently conducted. Section 3.11 of the Seller Disclosure Schedules sets forth all Permits or other agreements, including amendments thereof, that Seller or one of its Affiliates has obtained since January 1, 2014 from the United States Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, FINRA or any similar Governmental Authority in the United States or any other jurisdiction in connection with its operation of the Business. All fees and charges with respect to such Permits as of the date hereof have been paid in full. To the Knowledge of Seller, no event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension or lapse of any Permit set forth in Section 3.11 of the Seller Disclosure Schedules.

Section 3.12.Properties. (a) Seller has good title to, or in the case of leased property and assets has valid leasehold interests in, all Purchased Assets (whether real, personal, tangible or intangible), except for properties and assets sold since the Balance Sheet Date in the ordinary course of business consistent with past practice or where the failure to have such good title or valid leasehold interests would not, individually or in the aggregate, reasonably be expected to be material to the Business. No Purchased Asset is subject to any Lien, except:

(i)Liens disclosed on Section 3.12(a)(i) of the Seller Disclosure Schedules;

(ii)Liens disclosed on the Balance Sheet or notes thereto or securing liabilities reflected on the Balance Sheet or notes thereto;

(iii)Liens for taxes, assessments and similar charges that are not yet due or are being contested in good faith;

(iv)mechanic’s, materialman’s, carrier’s, repairer’s and other similar Liens arising or incurred in the ordinary course of business or that are not yet due and payable or are being contested in good faith;

(v)Liens incurred in the ordinary course of business in compliance with Applicable Law since the Balance Sheet Date; or

(vi)in the case of leased property, Liens to which the interest or title of the applicable lessor or sublessor may be subject

(vii)other Liens that would not reasonably be expected to be, individually or in the aggregate, material to the Business (paragraphs (i)-(vii) of this Subsection (a) of this Section 3.12 are, collectively, the “Permitted Liens”).

(b)The Purchased Assets (i) constitute all of the assets, properties, rights and interests used or held for use in connection with the Business as of the date hereof (other than immaterial assets, properties, rights and interests the absence of which will not affect the Buyer’s ability to conduct the Business) and (ii) are sufficient to conduct the Business in all material respects as conducted as of the date hereof, with the exception of, in the case of each of clauses (i) and (ii), services to be provided under the Transition Services Agreement. With the exception of those Excluded Assets that are subject to the Transition Services Agreement, none of the Excluded Assets are material to the Business. All Contracts that are participating financial institution agreements or user agreements relating to the Business that were in the name of Gain GTX, LLC or Gain Capital Group, LLC have been assigned to Bermuda Co. Upon consummation of the transfer of the Purchased Assets to Buyer at the Closing, Buyer will have acquired (i) “all or part of” Bermuda Co’s assets or business as such term is used in the Contracts that are user agreements and (i) “all or substantially all” of Bermuda Co’s assets or business as such term is used in the Contracts that are participating financial institution agreements.

Section 3.13.Intellectual Property.

(a)Section 3.13(a) of the Seller Disclosure Schedules contains a list of all registrations and applications for registration of the Business Intellectual Property Rights.

(b)None of the Business Intellectual Property Rights are subject to any judgment, injunction, order, decree or agreement restricting the use thereof by any Company or restricting the licensing thereof by any Company to any Person, in each case, except for non-exclusive licenses granted in the ordinary course of business.

(c)The Companies solely and exclusively own all right, title, and interest in and to, or otherwise have the right to use and operate, the ECN Platform, the Platform Source Code and any Intellectual Property Rights incorporated, embedded or otherwise included in, or necessary to offer, the ECN Platform, in each case, free and clear of all Liens, other than Permitted Liens. No Person, including any current or former employees and independent contractors, owns or has, or after consummation of the transactions contemplated by this Agreement will own or have, any right, title or interest in or to the ECN Platform, the Platform Source Code or the Intellectual Property Rights incorporated, embedded or otherwise included in, or necessary to offer, the ECN Platform, other than the rights of licensors or licensees of any Intellectual Property Rights therein that are licensed in the ordinary course of business to or by any Company. 

(d)The Business Intellectual Property Rights together constitute all the Intellectual Property Rights primarily related to or necessary for the conduct of the Business as currently conducted and the consummation of the transactions contemplated by this Agreement will not alter, encumber, impair or extinguish any Business Intellectual Property Right.

(e)(i) The Companies are, and the conduct of the Business is, not infringing, misappropriating or otherwise violating and since January 1, 2014 have not infringed, misappropriated or otherwise violated any Intellectual Property Right of any Person and (ii) since January 1, 2014, there has been no claim, action, suit, investigation or proceeding pending against, or, to the Knowledge of Seller, threatened against, any Company (A) based upon, or challenging or seeking to deny or restrict, the rights of such Company in any of the Business Intellectual Property Rights, (B) alleging that the use of the Business Intellectual Property Rights or any services, processes or products provided, manufactured, used, offered, marketed, imported or sold by such Company does or may conflict with, misappropriate, infringe or otherwise violate any Intellectual Property Right of any Person in any respect or (C) alleging that such Company, in respect of the Business, has infringed, misappropriated or otherwise violated any Intellectual Property Right of any Person in any respect.

(f)None of the Business Intellectual Property Rights material to the operation of the Business has been adjudged invalid or unenforceable in whole or part, and all such Business Intellectual Property Rights are valid and enforceable and all material registered Business Intellectual Property Rights are subsisting and in full force and effect. Since January 1, 2014, there is no pending, decided, settled or, to the Knowledge of Seller, material threatened action or order, opposition, cancellation, interference, reexamination, review or other proceeding or investigation or challenge related to the Business Intellectual Property Rights or its validity, registrability, enforceability or ownership. To the Knowledge of Seller, no Person has reverse engineered, disassembled or decompiled the ECN Platform.

(g)The Companies have taken all commercially reasonable steps in accordance with normal industry practice to maintain the confidentiality of all Trade Secrets that are material to the Business. Each of the Companies has, and enforces in all material respects, a policy requiring all employees, consultants and contractors of the Companies to execute Intellectual Property Rights assignment and confidentiality agreements for the benefit of any of the Companies.

(h)All of the Business Intellectual Property Rights, the ECN Platform and the Platform Source Code are fully transferable, alienable and licensable by the Companies without any material restriction and without any material payment to any Person, other than non-exclusive licenses granted in the ordinary course of business.

(i)None of the Companies (i) is in material breach of any of the terms or conditions of any license to any Open Source Materials or (ii) has taken any action that has, or would reasonably be expected to, (x) require the disclosure or distribution of or access to any Platform Source Code or (y) restrict the Companies’ ability to charge for access to and use of the ECN Platform.

(j)None of the Companies or any other Person acting on behalf of the Companies has disclosed or delivered, or permitted the disclosure or delivery by any escrow agent or other Person, any Platform Source Code to any Person. No event has occurred, and, to the Knowledge of Seller, no circumstance or condition exists, that (with or without notice or lapse of time, or both) would reasonably be expected to, require the disclosure or delivery by the Companies or any other Person acting on behalf of the Companies, of any Platform Source Code to any Person.

(k)The Companies have used all commercially reasonable efforts (i) to safeguard the security of the ECN Platform, all Software, data, databases, systems, information technology, networks, devices and equipment primarily used or primarily held for use in connection with the Business (the “Systems”) and (ii) to implement and maintain business continuity, backup, security and disaster recovery plans, procedures and facilities consistent with standard industry practice. To the Knowledge of Seller, there have been no unauthorized intrusions or breaches of the Systems that would require the Companies to notify customers or employees of such intrusion or breach or that was or would reasonably be expected to be material to the operations of the Business.

(l)Each of the Companies has (i) complied with Privacy and Security Laws in all material respects, (ii) complied with its published and internal privacy, marketing and security policies related to Privacy and Security Laws in all material respects and (iii) used commercially reasonable efforts to ensure that Personal Information is protected against loss, damage, and unauthorized access, use, modification, or other misuse. Since January 1, 2014, there has been no material loss, damage, or unauthorized access, use, modification, or other misuse of any such information by any Company or any of their respective employees, directors, officers or contractors.

Section 3.14.Insurance Coverage. Seller has made available to Buyer a list of, and true and complete copies of, all insurance policies and fidelity bonds relating to the Purchased Assets, the business and operations of the Business and its officers and employees. The insurance policies maintained by Seller with respect to the operation and conduct of the Business as currently in effect constitute, in all material respects, insurance against the risks of a character and in such amounts as are usually insured against by similarly situated companies in the same or similar businesses as the Business. There are no material claims by Seller pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds or in respect of which such underwriters have reserved their rights. No insurer under any such insurance policy has cancelled or generally disclaimed policies. For the avoidance of doubt, Buyer understands and agrees that all such insurance policies and fidelity bonds are in the name of Seller, that Buyer shall not be entitled to the benefits under any such policies and bonds, and that such policies and bonds will not continue in effect with respect to the Business after the Closing.

Section 3.15.Finders’ Fees. Except for Jefferies Group LLC, whose fees will be paid by Seller, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Seller who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement or the other Transaction Documents.

Section 3.16.Employees. (a) Seller or one of its Affiliates has provided to Buyer a complete list of all Business Employees as of a date no more than 10 Business Days prior to the date hereof and the following information for each such Business Employee: his or her (i) title or position (including whether full or part time); (ii) hire date; (iii) current base salary and bonus or other cash-based incentive opportunity; and (iv) exempt or non-exempt status. Seller or one of its Affiliates will provide to Buyer an updated version of such list not more than five Business Days prior to the Closing Date. No less than 15 days prior to the Closing Date, Seller or one of its Affiliates shall provide to Buyer the following information with respect to each Business Employee: (x) sick and vacation leave that is accrued but unused and (y) service credited for purposes of vesting and eligibility to participate under any Business Benefit Plan.

(a)With respect to Business Employees, Seller is in compliance with all Applicable Laws relating to employment, equal employment opportunity, non-discrimination, immigration, wages, hours, collective bargaining, workers’ compensation, working conditions, unemployment insurance, employee classification, employment practices and terms and conditions of employment. There are no material actions against Seller pending or, to Seller’s Knowledge, threatened, by any Governmental Authority in connection with the employment of any current or former employee, applicant, consultant or independent contractor of the Business, including, without limitation, any material claim (other than routine claims for benefits or wages) relating to unfair labor practices, employment discrimination, harassment, retaliation, wages and hours or any other employment related matter arising under Applicable Law.

(b)No union, employee association, works council or other similar body represents any Business Employees and none of Seller nor its Affiliates is a party to or bound by any labor or collective bargaining agreement and there are no pending or, to the Knowledge of Seller, threatened organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit with respect to, or otherwise attempting to represent, any of the Business Employees. There is not presently existing any and, to the Knowledge of Seller, there is no threatened, strike, slowdown, picketing, or work stoppage involving the Business or any of the Business Employees.

Section 3.17.Business Benefit Plans. (a) Section 3.17 of the Seller Disclosure Schedule sets forth each material Business Benefit Plan. With respect to such Business Benefit Plan, Seller has made available to Buyer copies (i) of the current plan documents, including all amendments thereto (or a written summary thereof in the case of an unwritten Business Benefit Plan) and (ii) the most recent IRS determination or opinion letter, if applicable.

(a)None of Seller or any of its ERISA Affiliates (i) sponsors, maintains or contributes to, or has in the past six years sponsored, maintained or contributed to, any employee benefit plan subject to Title IV of ERISA or (ii) contributes to, or has in the past six years contributed to, any “multiemployer plan”, as defined in Section 3(37) of ERISA.

(b)Each Business Benefit Plan has been maintained in material compliance with its terms and with the requirements prescribed by Applicable Law, including ERISA and the Code. Each Business Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination letter from the IRS upon which it is currently entitled to rely, or with respect to a prototype plan, can rely on an opinion letter from the IRS to the prototype plan sponsor, and no event has occurred that would reasonably be expected to adversely affect such qualification, and each related trust is exempt from taxation under Section 501(a) of the Code. There is no pending or, to Seller’s knowledge, threatened material action relating to any Business Benefit Plan, other than routine individual claims in the ordinary course of business for benefits provided for by Business Benefit Plans. No Business Benefit Plan provides benefits, including death or medical benefits, beyond termination of service or retirement other than coverage mandated by Applicable Law.

(c)The consummation of the transactions contemplated by this Agreement will not (either alone or together with any other event) (i) result in the payment of any amount that would not be deductible under Section 280G of the Code, whether under any Business Benefit Plan or otherwise, (ii) increase any amount of compensation or benefits otherwise payable under any Business Benefit Plan, (iii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Business Benefit Plan, (iv) require any contributions or payments to fund any obligations under any Business Benefit Plan or (v) limit the right to merge, amend or terminate any Business Benefit Plan.

(d)Notwithstanding anything to the contrary herein, except as set forth in Section 3.16 and this Section 3.17, no representations or warranties are being made in this Agreement with respect to any Business Benefit Plans or any other employee or employee benefits matters, including any such matters arising under ERISA or the Code.

Section 3.18.Tax. Except as set forth in the Balance Sheet (including the notes thereto) or on Section 3.18 of the Seller Disclosure Schedules, (a) Seller and the Companies have filed all material Tax returns required to be filed with respect to the Purchased Assets and such Tax returns as so filed disclose all material Taxes required to be paid with respect to the Purchased Assets for the periods covered thereby; (a) Seller and the Companies have timely paid all Taxes (whether or not shown on a Tax return)required to be paid on or prior to the date hereof, the non-payment of which would result in a Lien on any Purchased Asset or would result in the Buyer becoming liable or responsible therefor; (a) there is no action, suit, proceeding, investigation, audit or claim now proposed in writing or pending against Seller or the Companies or with respect to the Purchased Assets that could give rise to a Lien on any Purchased Asset; (a) there are no Liens on the Purchased Assets other than liens for Taxes not yet due and payable for which adequate reserves have been established in accordance with GAAP; (a) neither Seller nor the Companies currently are the beneficiary of any extension of time within which to file any Tax return with respect to a Purchased Asset; (a) none of the Purchased Assets are “United States real property interests” as such term is defined in Section 897 of the Code; and (a) neither Seller nor the Companies are party to any Tax allocation or sharing agreement or any agreement with a Taxing Authority, or have any liability for Taxes of any other Person (other than Seller and the Companies) that, in each case, will materially increase Buyer’s liability for Taxes with respect to the Purchased Assets after the Closing Date. Section 3.18 of the Seller Disclosure Schedules lists the jurisdictions in which Tax returns are or have been filed by Seller or any Company with respect to the Purchased Assets.

Section 3.19.Sanctions. (a) None of Seller or the Companies, nor any of their respective subsidiaries, directors or officers, nor, to the Knowledge of Seller, any of their respective employees, agents or Affiliates

(i)is, or is directly or indirectly owned or controlled by, a Restricted Party;

(ii)is engaged or has in the past five years been engaged in any dealings, directly or indirectly, with a Restricted Party in violation of applicable Sanctions in connection with the operation of the Business;

(iii)has in the past five years violated or is in violation of any applicable Sanctions in connection with the operation of the Business; or

(iv)has received notice of or is otherwise aware of any claim, action, suit, proceeding, investigation, or other inquiry with respect to potential liability with respect to applicable Sanctions in connection with the operation of the Business.

(b)Seller and the Companies have instituted, maintain and comply in all material respects with policies, procedures, and internal controls reasonably designed to ensure compliance with Sanctions in connection with the operation of the Business.

Section 3.20.Anti-corruption. None of Seller or the Companies, nor any of their respective subsidiaries, directors, or officers, nor, to the Knowledge of Seller, any of their respective employees, agents, or Affiliates has in the past five years engaged in any activity or conduct in violation of any applicable Anti-Corruption Law in connection with the operation of the Business, and Seller and the Companies have instituted, maintain, and comply in all material respects with policies, procedures and internal controls reasonably designed to ensure compliance with applicable Anti-Corruption Laws in connection with the operation of the Business.

Section 3.21.Anti-Money Laundering Laws. The operations of Seller, the Business, the Companies and their respective Affiliates are and have been conducted in compliance in all material respects with applicable Anti-Money Laundering Laws, and no action, suit, or proceeding by or before any Governmental Authority involving any of Seller, the Companies or their respective Affiliates with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of Seller, threatened in connection with the operation of the Business. Seller and the Companies have instituted, maintain, and comply in all material respects with policies, procedures, and internal controls reasonably designed to ensure compliance with applicable Anti-Money Laundering Laws in connection with the operation of the Business.

ARTICLE 4REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that:

Section 4.01.Corporate Existence and Power. Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.

Section 4.02.Corporate Authorization. The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby are within the corporate powers of Buyer and have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement and, upon their execution and delivery by Seller, the other Transaction Documents to which Seller is a party, constitute valid and binding agreements of Seller.

Section 4.03.Governmental Authorization. The execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby require no material action by or in respect of, or material filing with, any Governmental Authority.

Section 4.04.Noncontravention. The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (i) violate the certificate of incorporation or bylaws of Buyer, (i) assuming compliance with the matters referred to in Section 4.03, violate any Applicable Law, (i) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration of any right or obligation of Buyer or to a loss of any benefit to which Buyer is entitled under any provision of any agreement or other instrument binding upon Buyer or (i) result in the creation or imposition of any material Lien on any asset of Buyer.

Section 4.05.Litigation. There is no action, suit, investigation or proceeding pending against, or to the knowledge of Buyer, since January 1, 2017, threatened in writing against, Buyer before any arbitrator or any Governmental Authority which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

Section 4.06.Finders’ Fees. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Buyer who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement or the other Transaction Documents other than any such advisor whose fees and expenses will be paid entirely by Buyer.

Section 4.07.Financing. Buyer has, or will have prior to the Closing, sufficient cash, available lines of credit or other sources of immediately available funds to enable it to make payment of the Purchase Price and any other amounts to be paid by it hereunder.

Section 4.08.Inspections; No Other Representations. (a) Buyer is an informed and sophisticated purchaser, and has engaged expert advisors, experienced in the evaluation and purchase of property and assets such as the Purchased Assets as contemplated hereunder. Buyer has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Buyer acknowledges that Seller has given Buyer access to the key employees, documents and facilities of the Business. Buyer agrees to accept the Purchased Assets in the condition they are in on the Closing Date based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to Seller, except as expressly set forth in this Agreement or any other Transaction Document to which it is a party.

(a)Buyer acknowledges that, except for the representations and warranties expressly set forth in Article 3 or in any other Transaction Document to which it is a party, Seller has not made, and is not making, any express or implied representation or warranty of any nature to Buyer, its Affiliates or any of their representatives, at law or in equity, with respect to the Business, Seller or any of its Affiliates or any other matter related to the transactions contemplated hereby, and Buyer hereby expressly disclaims reliance on any such other representations or warranties not set forth in Article 3 or in any other Transaction Document to which it is a party (including as to the accuracy or completeness of any information provided to Buyer). Without limiting the generality of the foregoing, Buyer acknowledges that except as set forth in Article 3 or any other Transaction Document to which it is a party (i) Seller makes no representation or warranty with respect to (A) any projections, estimates or budgets delivered to or made available to Buyer of future revenues, future results of operations, future cash flows or future financial condition (or any component thereof) of the Business or the future business and operations of the Business (“Forecasts”) or (B) any other information or documents made available to Buyer or its counsel, accountants or advisors with respect to the Business, except as expressly set forth in this Agreement and (ii) the Forecasts have not been prepared in accordance with GAAP or standards applicable under any securities laws, such Forecasts reflect numerous assumptions and are subject to material risks and uncertainties, and actual results may vary, perhaps materially.

ARTICLE 5COVENANTS OF SELLER

Section 5.01.Conduct of the Business. From the date hereof until the Closing, Seller and each of the Companies, as applicable, shall conduct the Business in the ordinary course consistent with past practice and in compliance with Applicable Law and use their commercially reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of the present officers and employees of the Business, including the Key Personnel. Without limiting the generality of the foregoing, from the date hereof until the Closing, except as disclosed on Section 5.01 of the Seller Disclosure Schedules or as consented to by Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), with respect to the Business, Seller will not, and will not permit the Companies to:

(a)acquire a material amount of assets from any other Person except (i) pursuant to existing contracts or commitments set forth in the Seller Disclosure Schedules or (i) otherwise in the ordinary course of business consistent with past practice;

(b)sell, lease, sublease, license, sublicense, transfer, abandon, encumber or otherwise dispose of any Purchased Assets or Business Intellectual Property Rights except assets or rights that are not material to the Business (i) pursuant to existing contracts or commitments set forth in the Seller Disclosure Schedules or (i) otherwise in the ordinary course consistent with past practice;

(c)enter into, amend in any material respect or terminate a Contract, plan, or arrangement required to be disclosed pursuant to Section3.08(a);

(d)incorporate, embed or otherwise include any Open Source Materials or third party components into the ECN Platform other than in the ordinary course of business consistent with past practice;

(e)make, change or revoke any Tax election, make any agreement or settlement with any Taxing Authority regarding any amount of Taxes, file any amended Tax return, enter into any closing agreement, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Purchased Assets or file any amended Tax return with respect to the Purchased Assets; that, in each case, could reasonably be expected to materially increase Buyer’s liability for Taxes with respect to the Purchased Assets after the Closing Date;

(f)except as required by the terms of this Agreement or any Business Benefit Plan or Applicable Law in the ordinary course of business consistent with past practice, (i) grant or increase any severance or termination pay to any employee, director, consultant or other service provider of the Business (or materially amend any existing severance or termination pay arrangement), (ii) enter into any employment, deferred compensation or other similar agreement with any employee, director, consultant or other service provider of the Business (or materially amend any existing agreement), (iii) increase compensation, bonus or other benefits payable to any such individual under any Business Benefit Plan; or (iv) with respect to any Business Employees establish, adopt or materially amend any collective bargaining agreement or Business Benefit Plan;

(g)subject any Purchased Asset to any Lien other than Permitted Liens;

(h)waive any claims or rights of material value that relate primarily to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice;

(i)fail to maintain or protect any Business Intellectual Property Rights or grant any person a license in respect of any Business Intellectual Property Rights, in each case, other than in the ordinary course of business consistent with past practice;

(j)fail to pay or otherwise satisfy (except if being contested in good faith) any material accounts payable, liabilities or obligations of the Business when due and payable, other than to the extent that any such failure arises from Seller’s compliance with its obligations under this Section 5.01;

(k)make any change in any method of accounting or accounting practice or policy that is applicable to the Business other than as required by GAAP or required by Applicable Law;

(l)enter into any lease of real property that relates to the Business;

(m)commence any action, suit or proceeding relating to or involving the Business or the Purchased Assets;

(n)allow any Permit to terminate, expire or lapse;

(o)fail to maintain insurance coverage consistent with past practice relating to the Purchased Assets or the business and operations of the Business; or

(p)agree or commit to do any of the foregoing;

provided, however, that in the event that Seller or any Company would be prohibited from taking any action by reason of this Section 5.01 without the prior written consent of Buyer, such action may nevertheless be taken without such consent if Seller or such Company is required to take such action by Applicable Law. For the avoidance of doubt, Seller and the Companies shall be entitled to (i) pay cash dividends or otherwise to make cash distributions to their respective equityholders at any time prior to the Closing; (ii) repay or settle any Indebtedness, and make related capital increases or decreases, as the case may be; or (iii) take any action with respect to an Excluded Asset or Excluded Liability.

Section 5.02.Access to Information. From the date hereof until the Closing Date, Seller will cause the Companies to (i) give Buyer, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of the Companies relating to the Business, (ii) furnish to Buyer, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to the Business as such Persons may reasonably request and (iii) instruct the employees, counsel and financial advisors of Seller and the Companies to cooperate with Buyer in its investigation of the Business; provided that any requests for such access and information shall be directed to Seller or such other Person as Seller may designate in writing from time to time. Any investigation pursuant to this Section shall be conducted or occur at reasonable times during regular business hours, as approved in advance by Seller, and in such manner as not to interfere unreasonably with the conduct of the business or operations of Seller or the Companies. Notwithstanding the foregoing, in no event shall Buyer have access to any information that relates solely to any portion of the business of Seller and its Affiliates that is not being transferred pursuant to this Agreement, and the auditors and independent accountants of Seller or any of its Affiliates shall not be obligated to make any work papers available to any Person unless and until such Person has entered into reasonable and customary third-party access and confidentiality agreements in form and substance acceptable to such auditors or accountants. The foregoing shall not require Seller or any of its Affiliates to permit any inspection, or to disclose any information, that could reasonably be expected to result in (i) the disclosure of any Trade Secrets or the violation of any obligations of Seller or any of its Affiliates with respect to confidentiality if Seller shall have used reasonable best efforts to obtain the consent of such third party to such inspection or disclosure, (ii) the waiver of any attorney-client privilege (provided that the disclosing party shall use commercially reasonable efforts to provide the other party, to the extent possible, with access to the relevant information in a manner that would not reasonably be expected to result in any such waiver) or (iii) the violation of Applicable Law. Neither Seller nor any Company makes any representation or warranty as to the accuracy or completeness of any information (if any) provided pursuant to this Section 5.02, and Buyer may not rely on the accuracy or completeness of such information, in each case other than (subject to Section 4.08) as expressly set forth in Seller’s representations and warranties set forth in Article 3.

Section 5.03.Non-Competition.

(a)From the Closing until the third anniversary of the Closing, Seller shall not, and shall cause its Affiliates not to, within any jurisdiction or marketing area in which the Business is currently doing business, directly or indirectly own, manage, operate, control or participate in the ownership, management, operation or control of any electronic peer-to-peer institutional trading venue that offers products that are available for trading on the ECN Platform immediately prior to the Closing Date or that offers any of the following categories of products: (i) FX spot, (ii) FX options, (iii) FX swaps, (iv) FX forwards and (v) metals.

(b)It is the intent of the parties to this Agreement that the provisions of this Section5.03 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provisions or portion of this Section5.03 shall be adjudicated to be invalid or unenforceable, this Section5.03 shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such amendment to apply only with respect to the operation of this Section5.03 in the particular jurisdiction in which such adjudication is made.

(c)The parties recognize that the performance of the obligations under this Section5.03 by Seller is special, unique and extraordinary in character, and that in the event of a breach by Seller of the terms and conditions of this Section5.03, Buyer shall be entitled, if it so elects, to obtain damages for any breach of this Section 5.03 or to injunctive relief requiring specific performance by Seller of this Section5.03.

Section 5.04.Non-Solicitation of Employees.

(a)From the Closing until the third anniversary of the Closing, Seller shall not, and shall cause its Affiliates not to, knowingly solicit for employment any employee of the Business; provided, that this paragraph shall not preclude Seller or its Affiliates from soliciting for employment or hiring any such employee who (i) responds to a general solicitation through a public medium or general or mass mailing by or on behalf of Seller or any of its Affiliates that is not targeted at employees of the Business or (ii) contacts Seller or its Affiliates directly on such individual’s own initiative.

(b)From the Closing until the third anniversary of the Closing, Seller shall not, and shall cause its Affiliates not to, hire any of the Key Personnel; provided, that this paragraph shall not preclude Seller or its Affiliates from hiring any Key Personnel whose employment is terminated involuntarily by Buyer so long as such hiring does not occur until six months after the termination of such Key Personnel’s employment with Buyer.

(c)It is the intent of the parties to this Agreement that the provisions of this Section 5.04 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provisions or portion of this Section 5.04 shall be adjudicated to be invalid or unenforceable, this Section 5.04shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such amendment to apply only with respect to the operation of this Section 5.04 in the particular jurisdiction in which such adjudication is made.

(d)The parties recognize that the performance of the obligations under this Section 5.04 by Seller is special, unique and extraordinary in character, and that in the event of a breach by Seller of the terms and conditions of this Section 5.04 to be performed by Seller, Buyer shall be entitled, if it so elects, to obtain damages for any breach of this Section 5.04 or to injunctive relief requiring specific performance by Seller of this Section5.04.

Section 5.05.Trade Secret Transfer and Support.

(a)Seller shall, and shall cause its Affiliates to deliver to Buyer all Trade Secrets incorporated, embedded or otherwise included in or relating to the ECN Platform on, or as soon as reasonably practicable after, the Closing Date such that, after the Closing, Buyer can operate the Business as currently conducted without additional information (other than any immaterial information provided in connection with the Support provided under Section5.05(b) and Section 5.05(c)).

(b)For a period of ninety (90) days after the Closing Date, Seller shall, and shall cause its subsidiaries to, provide to Buyer up to one hundred (100) hours of Support at no additional cost to Buyer.

(c)Buyer may purchase additional Support at a mutually agreed upon rate designed to reasonably compensate Seller for all costs and expenses incurred in providing such Support; provided that the provision of any such additional support by Seller shall not unreasonably interfere with the ordinary course duties of Seller’s or its subsidiaries’ employees.

(d)The parties recognize that the performance of the obligations under this Section 5.05 by Seller is special, unique and extraordinary in character, and that in the event of the breach by Seller of the terms and conditions of this Section 5.05to be performed by Seller, Buyer and the Companies shall be entitled, if they so elect, to obtain damages for any breach of this Section 5.05.

Section 5.06.Certain FX Transactions and Non-Deliverable Metals Trades. Seller shall, and shall cause its Affiliates to, take all necessary actions so that there are no FX swaps, FX forwards or Non-Deliverable Metals Trades offered for trading on the ECN Platform as of the Closing Date.

Section 5.07.Customer Migration.Without limiting the obligations of Seller under Section 2.05, Section 7.01or Section 7.02, from and after the Closing Seller shall use its commercially reasonable efforts in consultation with Buyer (i) to facilitate migration of existing customers of the Business to Buyer or its Affiliate without disruption and (ii) take any other action necessary to preserve the existing client relationships of the Business for the benefit of Buyer.

ARTICLE 6COVENANTS OF BUYER

Section 6.01.Access. On and after the Closing Date, Buyer will afford promptly to Seller and its agents reasonable access to the properties, books of account, financial and other records (including accountant’s work papers), information, employees and auditors of the Business to the extent necessary to permit Seller to comply with tax, corporate or financial reporting obligations relating to any period ending on or before the Closing Date or in connection with any audit, investigation, dispute (including a dispute between the parties hereto) or litigation relating to the Business; provided that any such access by Seller shall not unreasonably interfere with the conduct of the business or operations of Buyer. Seller shall bear all of the out-of-pocket costs and expenses (including attorneys’ fees, but excluding reimbursement for general overhead, salaries and employee benefits) incurred in connection with the foregoing. Notwithstanding the foregoing, the auditors and independent accountants of Buyer or its Affiliates shall not be obligated to make any work papers available to any Person unless and until such Person has entered into reasonable and customary third-party access and confidentiality agreements in form and substance acceptable to such auditors or accountants. The foregoing shall not require Buyer or its Affiliates to permit any inspection, or to disclose any information, that could reasonably be expected to result in (i) the disclosure of any Trade Secrets or the violation of any obligations of Buyer or any of its Affiliates with respect to confidentiality if Buyer shall have used reasonable best efforts to obtain the consent of such third party to such inspection or disclosure, (ii) the waiver of any attorney-client privilege (provided that the disclosing party shall use commercially reasonable efforts to provide the other party, to the extent possible, with access to the relevant information in a manner that would not reasonably be expected to result in any such waiver) or (iii) the violation of Applicable Law. Neither Buyer nor any of its Affiliates makes any representation or warranty as to the accuracy or completeness of any information provided pursuant to this Section6.01, and Seller may not rely on the accuracy or completeness of such information, in each case other than as expressly set forth in Buyer’s representations and warranties set forth in Article 4.

Section 6.02.Contact with Customers and Suppliers. Prior to the Closing, Buyer and Buyer’s representatives will contact and communicate with the employees, customers, vendors and other business relations (other than potential financing sources) of the Business in connection with the transactions contemplated by this Agreement only to the extent permitted by Applicable Law and with the prior written consent of Seller (such consent shall not be unreasonably withheld).

Section 6.03.Employees and Employee Benefits. (a) Buyer shall, or shall cause its Affiliates to, make offers of employment to Business Employees who are listed in Section 6.03(a) of the Seller Disclosure Schedules (the “Business Employees”), which offers of employment shall be contingent on the Closing and such Business Employees otherwise meeting the general hiring conditions imposed by Buyer with respect to its employees generally (each such Business Employee who accepts such offer of employment a “Transferred Employee” and each Business Employee who does not transfer to Buyer, a “Non-Transferred Employee”). Such offers will be consistent with Section 6.03(b) (a “Qualifying Offer”) and shall be made on a schedule that permits each Transferred Employee to commence employment with Buyer or its appropriate Affiliate as of the Closing. Seller shall bear any and all obligations and liability under the WARN Act (as defined below) resulting from any employment losses pursuant to this Section 6.03 and shall be solely responsible for any compensation or other amounts payable to any current or former employee, director, independent contractor or consultant of the Business for any period relating to service with Seller or any of the Companies at any time on or prior to the Closing Date. Seller shall remain responsible for all obligations, liabilities and commitments in respect of any current or former employee, director, independent contractor or consultant of the Business under any severance benefit plans, programs, policies, agreements and arrangements of Seller or any its Affiliates in effect immediately prior to the Closing Date in respect of claims made by any current or former employee, director, independent contractor or consultant of the Business for severance or other separation benefits (including claims for wrongful dismissal, notice of termination of employment or pay in lieu of notice), including, without limitation, arising out of, relating to or in connection with (i) any Non-Transferred Employee, (ii) any Business Employee who declines Buyer’s Qualifying Offer and (iii) Seller’s termination of employment of any Business Employee on or prior to the Closing Date. Notwithstanding the above or anything else to the contrary, Buyer shall be solely responsible and liable for, and shall, as soon as reasonably practicable, reimburse Seller for, any and all obligations and liability incurred by Seller under Seller’s severance benefit policy and under the Worker Adjustment and Retraining Notification Act and any applicable state or local equivalent (collectively, the “WARN Act”), in respect to any Business Employee who does not become a Transferred Employee, if Buyer or its Affiliates have failed to make a Qualifying Offer to such Business Employee.

(a)For a period of at least 12 months commencing on the Closing Date, Buyer shall provide, or shall cause its Affiliates to provide, the Transferred Employees with (i) base salaries or wage rates and cash bonus opportunities that are substantially comparable in the aggregate to the base salaries or wage rates and bonus opportunities provided to such Transferred Employee immediately prior to the Closing Date, and (i) other employee benefits (excluding, any equity awards and tax-qualified and nonqualified defined benefit pension and retiree health benefits) that are substantially comparable in the aggregate to the employee benefits provided to such Transferred Employee immediately prior to the Closing Date, which shall include the severance benefits set forth in Section 6.03(b) of the Seller Disclosure Schedules.

(b)Except to the extent required by Applicable Law or an applicable Business Benefit Plan, effective as of the Closing Date, each Transferred Employee shall cease all active participation in, and accrual of benefits under, any Business Benefit Plan.

(c)(i) Seller shall be solely responsible and liable for all obligations and liability under COBRA for each Non-Transferred Employee, each former Business Employee currently receiving health benefits pursuant to COBRA and each Business Employee who receives a Qualifying Offer from Buyer but declines, and (i) Buyer shall be solely responsible and liable for all obligations and liability under COBRA for each Transferred Employee and any Business Employee who does not become a Transferred Employee, if Buyer or one of its Affiliates have failed to make a Qualifying Offer to such Business Employee.

(d)As of the Closing Date, all equity awards (including stock options, restricted stock unit awards and any other equity or equity-based awards) held by Transferred Employees shall be subject to accelerated vesting and Seller shall be responsible for any and all amounts that become due in respect of such awards.

(e)With respect to any employee benefit plan maintained by Buyer or its Affiliates in which any Transferred Employee becomes a participant, for purposes of determining eligibility to participate, vesting, vacation, paid time-off and severance plan and other benefit plan accruals (other than benefit accrual under a defined benefit pension plan), each Transferred Employee’s service with Seller or any of its Affiliates (including with the Business) (as well as service with any predecessor employer, to the extent service with the predecessor employer is recognized by Seller or its applicable Affiliate) shall be treated as service with Buyer and its Affiliates; provided, however, that such service need not be recognized to the extent that such recognition would be inconsistent with the terms of any such employee benefit plan or result in any duplication of benefits.

(f)Buyer shall, or shall cause its Affiliates to, use commercially reasonable efforts to waive any preexisting conditions, limitations, exclusions, actively-at-work requirements and waiting periods under any welfare benefit plan maintained by Buyer or any of its Affiliates in which Transferred Employees (and their eligible dependents) will be eligible to participate from and after the Closing, except to the extent that such preexisting conditions, limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or waived under the comparable Business Benefit Plan immediately prior to the Closing. Buyer shall use commercially reasonable efforts to recognize, or shall cause its Affiliates to use commercially reasonable efforts to recognize, all co-payments, deductibles and similar expenses and out-of-pocket maximums incurred by each Transferred Employee (and his or her eligible dependents) prior to the Closing for purposes of satisfying any analogous deductible and co-payment limitations and out-of-pocket requirements under the relevant welfare benefit plans in which such Transferred Employee (and his or her eligible dependents) will be eligible to participate from and after the Closing.

(g)Buyer will permit Transferred Employees who are participants in the GAIN Capital Group, LLC 401(k) Plan (the “Seller 401(k) Plan”) and who are employed by Buyer or one of its Affiliates following the Closing to rollover distributions from the Seller 401(k) Plan into a defined contribution plan established or maintained by Buyer or one of its Affiliates (the “Buyer’s 401(k) Plan”), in accordance with the terms of Buyer’s 401(k) Plan.

(h)The parties agree to cooperate in good faith to determine whether any notification may be required under the WARN Act as a result of the transactions contemplated by this Agreement. On or as soon as practicable following the Closing Date, Seller shall deliver to Buyer a true, complete and correct list of all Persons who suffered employment losses (as defined in the WARN Act) by all Business Employees occurring within 90 days of the Closing Date. Buyer will be responsible for providing any notification that may be required under the WARN Act after the Closing Date with respect to any Transferred Employees. Seller will be responsible for providing any notification that may be required under the WARN Act on or prior to the Closing Date.

(i)Without limiting the generality of the last sentence of Section 11.11, nothing in this Section 6.03, express or implied, is intended to or shall confer upon any other Person, including any current or former employees or any Transferred Employee, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, and no provision of this Section 6.03 shall constitute an amendment of, or an undertaking to amend, any Business Benefit Plan or any employee benefit plan, program or arrangement maintained by Buyer or its Affiliates. Nothing in this Section 6.03 shall create any obligation on the part of Buyer or its Affiliates, as applicable, to continue to employ any Transferred Employee for any definite period following the Closing Date.

Section 6.04.Seller Marks. (a) Buyer will have no right, title or interest in or to (i) the “GAIN Capital” name (and any trademark related thereto), (ii) any names and trademarks listed in Section 6.04 of the Seller Disclosure Schedules and (iii) any variation or derivative of any of the foregoing and any names or trademarks, in each case, that are confusingly similar to any of the foregoing (collectively, the “Seller Marks”), excluding, for the avoidance of doubt, any trademarks included in the Business Intellectual Property Rights. Buyer hereby acknowledges and agrees that neither it nor any of its Affiliates shall acquire any goodwill, rights or benefits arising from the Seller Marks and all such goodwill, rights and benefits shall inure solely to Seller.

(a)Seller shall and shall cause its Affiliates to, as soon as reasonably practicable (and in any event within 90 days) after the Closing, cease all consumer-facing or public-facing use (the “Commercial Use”) of, and thereafter refrain from licensing or otherwise authorizing any Affiliates or third parties to make Commercial Use of any trademarks, service marks, Internet Domain names, logos, trade names, trade dress, company names and other identifiers of source or goodwill that include any Purchased Assets, and any confusingly similar variation of any of the foregoing.

(b)Buyer shall and shall cause its Affiliates to, as soon as reasonably practicable (and in any event within 90 days) after the Closing, cease all Commercial Use of the Seller Marks.

(c)Buyer and its Affiliates shall, for a period of 120 days after the Closing, be entitled to use, solely in connection with the operation of the ECN Platform for internal purposes and not for the purposes of Commercial Use, the Seller Marks, after which period the Buyer and its Affiliates shall cease any and all use of the Seller Marks, including by deleting or destroying any and all materials under their control that contain any Seller Mark.

(d)From and after the Closing, none of Buyer or its Affiliates shall challenge the ownership, validity or enforceability of any Seller Mark.

ARTICLE 7COVENANTS OF BUYER AND SELLER

Section 7.01.Reasonable Best Efforts; Further Assurances. (a) Subject to the terms and conditions of this Agreement, Buyer and Seller shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under Applicable Law to consummate the transactions contemplated by this Agreement. Seller and Buyer agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement and to vest in Buyer good title to the Purchased Assets.

(a)In furtherance and not in limitation of the foregoing, each of Buyer and Seller shall provide or cause to be provided to any Governmental Authority information and documents requested by any such Governmental Authority or necessary, proper or advisable to permit consummation of the transactions contemplated by this Agreement as promptly as possible after the execution of this Agreement.

Section 7.02.Certain Filings. Seller and Buyer shall cooperate with one another (i) in determining whether any (x) consents, registrations, approvals, waivers, orders, interpretive guidance, exemptions, licenses, permits and authorizations are necessary to be obtained from any Governmental Authority, (y) other action by or in respect of, or filing with, any Governmental Authority is required, or (z) actions, consents, registrations, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and (i) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers.

Section 7.03.Public Announcements. Except for the press releases of Buyer and Seller, substantially in the forms attached hereto as Exhibit G and Exhibit H, respectively, to be issued by the parties immediately after the execution of this Agreement, Buyer and Seller agree to consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press releases and public announcements the making of which may be required by Applicable Law or any listing agreement with any national securities exchange, will not issue any such press release or make any such public statement without the written consent of Buyer and Seller (such consent not to be unreasonably withheld), including, for the avoidance of doubt, the press release or press releases proposed to be issued by the parties hereto immediately after the execution of this Agreement.

Section 7.04.Tax Covenants. (a) Any Taxes applicable to, or imposed on any Person, with respect to the Purchased Assets (other than income, franchise and other similar Taxes) for a taxable period that includes but does not end on the Closing Date (collectively, the “Apportioned Obligations” and such taxable period, a “Straddle Period”) shall be timely paid by Buyer or Seller, as applicable. Such Taxes shall be apportioned between the Pre-Closing Tax Period and the taxable period beginning after the Closing Date based on the number of days in such taxable period included in the Pre-Closing Tax Period and the number of days in the remainder of the taxable period. Seller shall be responsible for the portion of such Apportioned Obligations that are apportioned to the Pre-Closing Tax Period, except to the extent reflected in Closing Net Working Capital (as finally determined), and Buyer shall be responsible for all other Apportioned Obligations. The non-paying Party shall promptly reimburse the paying Party for its share of any Apportioned Obligations paid by the paying Party in accordance with Section 7.04(b). For the avoidance of doubt, each of Buyer and Seller shall be responsible for their own income, franchise and other Taxes associated with the Purchased Assets that are not taken into account in Apportioned Obligations.

(a)Upon payment of any such Apportioned Obligations, the paying party shall present a statement to the non-paying party setting forth the amount of reimbursement to which the paying party is entitled under Section 7.04(a), together with such supporting evidence as is reasonably necessary to calculate the amount to be reimbursed or refunded. The applicable party shall make the payment in the foregoing sentence promptly but in no event later than ten days after the presentation of such statement. Any payment not made within such time shall bear interest at the federal underpayment rate for each day until paid.

(b)Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating to the Purchased Assets (including access to books and records) as is reasonably necessary for the filing of all Tax returns, the making of any election relating to Taxes, the preparation for any audit by any governmental entity, and the prosecution or defense of any claim, suit or proceeding relating to any Tax. Buyer and Seller shall retain all books and records with respect to Taxes pertaining to the Purchased Assets for a Pre-Closing Tax Period for a period of at least six years following the Closing Date. On or after the end of such period, each party shall provide the other with at least ten days prior written notice before destroying any such books and records, during which period the party receiving such notice can elect to take possession, at its own expense, of such books and records. Seller and Buyer shall cooperate with each other in the conduct of any audit or other proceeding relating to Taxes involving the Purchased Assets with respect to any Pre-Closing Tax Period.

(c)As promptly as practicable, but not later than 120 days, after the production of the Closing Statement, Seller shall deliver to Buyer a statement (the “Allocation Statement”) allocating the Purchase Price (and any Liabilities required to be taken into account for U.S. federal income tax purposes) among the Purchased Assets in accordance with Section 1060 of the Code. If within 10 days after the delivery of the Allocation Statement Buyer notifies Seller that Buyer objects to the allocation set forth in the Allocation Statement, Seller and Buyer shall use commercially reasonable efforts to resolve such dispute within 20 days. In the event that Buyer and Seller are unable to resolve such dispute within 20 days, Seller and Buyer shall jointly retain a nationally recognized accounting firm (the “Accounting Referee”) to resolve the disputed items in accordance with this Agreement. Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall be adjusted to reflect such resolution. The costs, fees and expenses of the Accounting Referee shall be borne equally by Seller and Buyer.

(d)Seller and Buyer agree to (i) be bound by the Allocation Statement and (i) act in accordance with the allocation reflected on the Allocation Statement in the preparation, filing and audit of any U.S. federal, state and local Tax return (including, to the extent required, filing the IRS Form 8594 with its federal income Tax return for the taxable year that includes the Closing Date). If an adjustment is made with respect to the Purchase Price, the Allocation Statement shall be adjusted in accordance with Section 1060 of the Code and as mutually agreed by Buyer and Seller. In the event that an agreement is not reached within 20 days after the determination of the adjustment to the Purchase Price, any disputed items shall be resolved in the manner described in ‎Section 7.04(d). Buyer and Seller agree to file any additional information return required to be filed pursuant to Section 1060 of the Code and to treat the Allocation Statement as adjusted in the manner described in this Section 7.04(e) for each taxable year to which the adjusted Allocation Statement relates.

Section 7.05.Confidentiality. (a) Prior to the Closing Date and after any termination of this Agreement, either party hereto (the “Disclosing Party”) may disclose certain confidential information to the other party hereto (the “Recipient”). The Recipient will hold in confidence and not use for any purpose (other than, prior to the Closing Date, in connection with the consummation of the transactions contemplated hereby), and will use their reasonable best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold in confidence and not use for any purpose (other than, prior to the Closing Date, in connection with the consummation of the transactions contemplated hereby), unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning the Business, Seller, any Company, Buyer or their respective Affiliates in connection with the transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (i) previously known on a nonconfidential basis by the Recipient, (i) in the public domain through no fault of the Recipient or (i) later lawfully acquired by the Recipient from sources other than the Disclosing Party or its Affiliates; provided that the Recipient may disclose such information to its officers, directors, employees, accountants, counsel, consultants, advisors and agents in connection with the transactions contemplated by this Agreement so long as such Persons are informed by the Recipient of the confidential nature of such information and are directed by the Recipient to treat such information confidentially. The Recipient shall be responsible for any failure to treat such information confidentially or any misuse of such information by such Persons. The obligation of the Recipient and its Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar information. If this Agreement is terminated, Buyer and its Affiliates will, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to Seller all documents and other materials, and all copies thereof, obtained by Buyer or its Affiliates or on their behalf from or on behalf of Seller or any Company in connection with this Agreement and the transactions contemplated hereby that are subject to such confidence.

(a)After the Closing Date, Seller shall and shall use its reasonable best efforts to cause its subsidiaries to maintain all confidential information relating to the Business and the Business Intellectual Property Rights. Seller shall safeguard the confidential information relating to the Business or the Business Intellectual Property Rights from unauthorized use, access, or disclosure with the same care with respect to such information as they would take to preserve the confidentiality of their own similar information. Seller shall, upon learning of any unauthorized use or disclosure of confidential information relating to the Business or the Business Intellectual Property Rights, promptly notify Buyer of such unauthorized use or disclosure and take all reasonable steps to prevent further use or disclosure.

Section 7.06.Wrong Pockets. (a) If, after the Closing, Buyer or Seller identifies any Purchased Asset that inadvertently was not previously transferred to Buyer or that would be required to be transferred to Buyer in order to comply with Section 2.01, then Seller shall, or shall cause one of the Companies to, transfer such Purchased Asset to Buyer for no additional consideration. If, after the Closing, Buyer or Seller identifies any Excluded Asset that inadvertently was transferred to Buyer or that should have been excluded from the Purchased Assets in accordance with Section 2.02, then Buyer shall, or shall cause one of its Affiliates to, transfer such Excluded Asset to Seller for no additional consideration.

(a)On and after the Closing Date, Seller will afford promptly to Buyer and its agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors in connection with any audit, investigation, dispute (including a dispute between the parties hereto) or litigation relating to the Business; provided that any such access by Buyer shall not unreasonably interfere with the conduct of the business or operations of Seller. Buyer shall bear all of the out-of-pocket costs and expenses (including attorneys’ fees, but excluding reimbursement for general overhead, salaries and employee benefits) incurred in connection with the foregoing. Notwithstanding the foregoing, the auditors and independent accountants of Seller or its Affiliates shall not be obligated to make any work papers available to any Person unless and until such Person has entered into reasonable and customary third-party access and confidentiality agreements in form and substance acceptable to such auditors or accountants. The foregoing shall not require Seller or its Affiliates to permit any inspection, or to disclose any information, that could reasonably be expected to result in (i) the disclosure of any Trade Secrets or the violation of any obligations of Seller or any of its Affiliates with respect to confidentiality if Seller shall have used reasonable best efforts to obtain the consent of such third party to such inspection or disclosure, (ii) the waiver of any attorney-client privilege (provided that the disclosing party shall use commercially reasonable efforts to provide the other party, to the extent possible, with access to the relevant information in a manner that would not reasonably be expected to result in any such waiver) or (iii) the violation of Applicable Law. Neither Seller nor any of its Affiliates makes any representation or warranty as to the accuracy or completeness of any information provided pursuant to this Section 7.06(b), and Buyer may not rely on the accuracy or completeness of such information, in each case other than as expressly set forth in Seller’s representations and warranties set forth in Article 3.

Section 7.07.Mitigation. On and after the Closing Date, with respect to the conduct of the Business prior to the Closing that results in or reasonably would be expected to result in claims hereunder by Buyer or any of its Affiliates, Buyer shall use its commercially reasonable efforts to mitigate the possible Damages arising therefrom, including by not taking any actions that materially increase the risk of Damages described in Section9.02(a)(iv), provided, however, that the foregoing shall not be deemed to limit Buyer’s ability to (i) terminate or modify any customer Contract in compliance with such customer Contract, (ii) apply for and obtain a license or other applicable Permit in any jurisdiction, (iii) respond truthfully to any inquiry received from any Governmental Authority or (iv) take any other action required by Applicable Law.

ARTICLE 8CONDITIONS TO CLOSING

Section 8.01.Conditions to Obligations of Buyer and Seller. The obligations of Buyer and Seller to consummate the Closing are subject to the satisfaction, at or before the Closing, of the following conditions:

(a)No provision of any Applicable Law shall prohibit the consummation of the Closing.

(b)All actions by or in respect of or filings with any Governmental Authority required to permit the consummation of the Closing shall have been taken, made or obtained.

Section 8.02.Conditions to Obligation of Buyer. The obligation of Buyer to consummate the Closing is subject to the satisfaction of the following further conditions:

(a)Seller shall have performed in all material respects all of its obligations hereunder required to be performed on or prior to the Closing Date.

(b)The representations and warranties of Seller contained in this Agreement and in any certificate or other writing delivered by Seller pursuant hereto shall, disregarding all qualifications as to materiality and Material Adverse Effect,(i) with respect to all representations and warranties other than the representations and warranties of Seller contained in Section 3.12(b), be true on and as of the Closing Date, as if made on and as of such date (except for representations and warranties that are expressly made as of a specific date, which shall be true disregarding such qualifications on and as of such date), except where the failure of such representations and warranties to be true would not in the aggregate reasonably be expected to have a Material Adverse Effect, and (ii) with respect to the representations and warranties of Seller contained in Section 3.12(b), be true in all material respects on and as of the Closing Date, as if made on and as of such date.

(c)Seller shall have delivered, or caused to be delivered, to Buyer the Master Services Agreement, duly executed by Seller or its Affiliate(s), as applicable.

(d)Seller shall have delivered, or caused to be delivered, to Buyer the GTX User Agreement, duly executed by Seller or its Affiliate(s), as applicable.

(e)Seller shall have delivered, or caused to be delivered, to Buyer the Assignment and Assumption Agreement, duly executed by Seller or its Affiliate(s), as applicable.

(f)No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, that restrains or prohibits any transaction contemplated hereby.

(g)Since the date of this Agreement, no Material Adverse Effect has occurred.

(h)All Liens relating to the Purchased Assets other than Permitted Liens shall have been released in full, and Seller shall have delivered to Buyer written evidence of the release of such Liens.

(i)Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 8.02(a) and Section 8.02(b) have been satisfied (the “Buyer Closing Certificate”).

Section 8.03.Conditions to Obligation of Seller. The obligation of Seller to consummate the Closing is subject to the satisfaction of the following further conditions:

(a)Buyer shall have performed in all material respects all of its obligations hereunder required to be performed by it on or prior to the Closing Date.

(b)The representations and warranties of Buyer contained in this Agreement and in any certificate or other writing delivered by Buyer pursuant hereto shall be true in all material respects on and as of the Closing Date, as if made on and as of such date.

(c)Buyer shall have delivered, or caused to be delivered, to Seller the Master Services Agreement, duly executed by Buyer or its Affiliate(s), as applicable.

(d)Buyer shall have delivered, or caused to be delivered, to Seller the GTX User Agreement, duly executed by Buyer or its Affiliate(s), as applicable.

(e)Buyer shall have delivered, or caused to be delivered, to Seller the Assignment and Assumption Agreement, duly executed by Seller or its Affiliate(s), as applicable.

(f)Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section8.03(a) and Section8.03(b) have been satisfied (the “Seller Closing Certificate”).

(g)Buyer shall have provided Seller with a true, complete and correct copy of the R&W Insurance Policy conforming to the requirements specified in Section 9.08 and a true and complete copy of the form of the binders for the R&W Insurance Policy.

ARTICLE 9SURVIVAL; INDEMNIFICATION

Section 9.01.Survival. The representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall terminate and be of no further force and effect on the date that is 12 months after the Closing Date (the “Cut-Off Date”). Each of (i) the covenants and other agreements, in each case, contained in this Agreement to be performed prior to the Closing shall terminate and be of no further force and effect on the Closing Date and (ii) the covenants and agreements that contemplate performance after the Closing or otherwise expressly by their terms survive the Closing, will survive in accordance with its terms. Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if notice of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been validly given prior to such time to the party against whom such indemnity may be sought.

Section 9.02.Indemnification by Seller; Indemnification by Buyer.

(a)Subject to the limitations set forth herein, from and after the Closing Date, Seller shall indemnify Buyer and its Affiliates against and agree to hold each of them harmless from any and all damage, loss and expense (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding whether involving a third party claim or a claim solely between the parties hereto) (“Damages”) actually suffered by Buyer or any of its Affiliates arising out of:

(i) any misrepresentation or breach of warranty (a “Warranty Breach”) by Seller;

(ii) any breach of covenant or agreement made or to be performed by Seller pursuant to this Agreement;

(iii)any Excluded Liability;or

(iv)any regulatory or legal actions undertaken by or claims asserted by any non-U.S. Governmental Authority with respect to the conduct of the Business prior to the Closing within the jurisdiction of such non-U.S. Governmental Authority;

provided that with respect to indemnification by Seller pursuant to Section9.02(a)(i): (A) Seller shall not be liable for any single Damage or series of related Damages that does not exceed $75,000, (B) Seller shall not be liable for any Damages in respect of any matter unless and until the aggregate amount of all Damages with respect thereto (disregarding any Damages for which Seller is not liable pursuant to the foregoing clause (i)) exceeds $500,000 and then only to the extent of such excess and (C) Seller’s maximum aggregate liability of Seller for all such Damages shall not exceed $500,000; provided,further that with respect to indemnification for any breach of covenant or agreement pursuant to Section9.02(a)(ii), the maximum aggregate liability for all such breaches shall not exceed the Purchase Price.

(b)Effective at and after the Closing, Buyer hereby indemnifies Seller and its Affiliates against and agrees to hold each of them harmless from any and all Damages actually suffered by Seller and its Affiliates arising out of:

(i)a Warranty Breach by Buyer;

(ii)any breach of covenant or agreement made or to be performed by Buyer pursuant to this Agreement; or

(iii)any Assumed Liability;

provided that with respect to indemnification by Buyer for Warranty Breaches pursuant to Section9.02(b)(i): (A) Buyer shall not be liable for any single Damage or series of related Damages that does not exceed $75,000, (B) Buyer shall not be liable for any Damages in respect of any matter unless and until the aggregate amount of all Damages with respect thereto (disregarding any Damages for which Buyer is not liable pursuant to the foregoing clause (i)) exceeds $500,000 and then only to the extent of such excess and (C) Buyer’s maximum aggregate liability of Buyer for all such Damages shall not exceed $500,000; provided,further that with respect to indemnification for any breach of covenant or agreement pursuant to Section9.02(b)(ii), the maximum aggregate liability for all such breaches shall not exceed the Purchase Price.

Section 9.03.Third Party Claim Procedures. (a)The party seeking indemnification under Section 9.02 (the “Indemnified Party”) agrees to give prompt notice in writing (a “Claims Notice”) to the party against whom indemnity is to be sought (the “Indemnifying Party”) of the assertion of any claim or the commencement of any suit, action, audit, investigation or proceeding by any third party (“Third Party Claim”) in respect of which indemnity may be sought under such Section. Such notice shall set forth in reasonable detail such Third Party Claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party.

(a)The Indemnifying Party shall have 30 days from the date on which the Indemnifying Party received the Claims Notice to notify the Indemnified Party that the Indemnifying Party desires to assume the defense or prosecution of the Third Party Claim and any litigation resulting therefrom with counsel of its choice. If the Indemnifying Party assumes the defense of such claim in accordance herewith: (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim, but the Indemnifying Party shall control the investigation, defense and, subject to clause (ii) below, the settlement thereof (provided that the Indemnified Party shall be entitled to reimbursement for the fees and expenses of its co-counsel if, in the reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists between the Indemnifying Party and the Indemnified Party that would make such separate representation advisable); (i) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld, conditioned or delayed); and (i) the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim without the prior written consent of the Indemnified Party unless the judgment or settlement provides solely for the payment of money, the Indemnifying Party makes such payment (subject to the applicable limitations contained herein) and the Indemnified Party receives an express unconditional release. The parties shall act in good faith in responding to, defending against, settling or otherwise dealing with Third Party Claims, and cooperate in any such defense and give each other reasonable access to all information relevant thereto. Whether or not the Indemnifying Party has assumed the defense of such Third Party Claim, the Indemnifying Party will not be obligated to indemnify the Indemnified Party hereunder with respect to any settlement entered into or any judgment consented to without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense or prosecution of any Third Party Claim if (w) the Third Party Claim relates to or has arisen in connection with any criminal action, (x) the Third Party Claim seeks an injunction or equitable relief against any Indemnified Party, (y) the Indemnified Party fails or is failing to defend in good faith the Third Party Claim or (z) if Seller is the Indemnifying Party, such Third Party Claim may reasonably be expected to give rise to Damages that are more than 100% of any applicable limitation on Seller’s liability hereunder.

(b)If the Indemnifying Party does not assume the defense of such Third Party Claim within 30 days of receipt of the Claims Notice, the Indemnified Party will be entitled to assume such defense, at its sole cost and expense (or, if the Indemnified Party incurs Damages with respect to the matter in question for which the Indemnified Party is entitled to indemnification pursuant to Article 9, at the expense of the Indemnifying Party), upon delivery of notice to such effect to the Indemnifying Party; provided, however, that the Indemnifying Party (i) shall have the right to participate in the defense of the Third Party Claim at its sole cost and expense; (ii) may at any time thereafter assume defense of the Third Party Claim if it would have been entitled to do so pursuant to Section 9.03(b), in which event the Indemnifying Party shall bear the reasonable fees, costs and expenses of the Indemnified Party’s counsel incurred prior to the assumption by the Indemnifying Party of defense of the Third Party Claim; and (iii) if the Indemnifying Party shall have exercised its right to participate in, or assume, the defense of such Third Party Claim, shall not be obligated to indemnify the Indemnified Party hereunder for any settlement entered into or any judgment consented to without the Indemnifying Party’s prior written consent (which shall not be unreasonably withheld).

(c)Each party shall cooperate, and cause their respective affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

Section 9.04.Direct Claim Procedures. The Indemnified Party will deliver a Claims Notice to the Indemnifying Party promptly upon its discovery of any matter for which the Indemnifying Party may be liable to the Indemnified Party hereunder that does not involve a Third Party Claim, which Claims Notice shall also (taking into account the information then available to the Indemnified Party (a) state that the Indemnified Party has paid or properly accrued Damages or anticipates that it will incur liability for Damages for which such Indemnified Party is entitled to indemnification pursuant to this Agreement, and (a) indicate the date such item was, or is anticipated to be, paid or accrued; provided that the failure of any Indemnified Party to provide such notice shall not relieve any Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the applicable Indemnifying Party. The Indemnified Party shall reasonably cooperate and assist the Indemnifying Party in determining the validity of any claim for indemnity by the Indemnified Party and in otherwise resolving such matters. Such assistance and cooperation shall include providing reasonable access to and copies of information, records and documents relating to such matters. If the Indemnifying Party has timely disputed its indemnity obligation for any Damages with respect to such claim, the parties shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of jurisdiction determined pursuant to Section 11.09.

Section 9.05.Calculation of Damages. (a) The amount of any Damages payable under Section 9.02 by the Indemnifying Party shall be net of any (i) amounts recovered by the Indemnified Party under applicable insurance policies or from any other Person alleged to be responsible therefor and (i) Tax benefit realized by the Indemnified Party arising from the incurrence or payment of any such Damages, and shall be (without duplication of any amounts already included in Damages) increased by the Tax cost incurred by the Indemnified Party as a result of the indemnity payments. If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount.

(a)The Indemnifying Party shall not be liable under Section 9.02 for any (i) Damages relating to any matter to the extent that (A) there is included in the Closing Statement a specific liability or reserve relating to such matter or (B) the Indemnified Party had otherwise been compensated for such matter pursuant to the adjustment to the Purchase Price under Section 2.09 or (i) exemplary or punitive Damages.

(b)The party seeking indemnification under this Article 9 shall use its commercially reasonable efforts to mitigate any Loss which forms the basis of an indemnification claim hereunder. If such Indemnified Party mitigates its loss after the Indemnifying Party has paid the Indemnified Party under any indemnification provision of this Agreement in respect of that loss, the Indemnified Party must notify the Indemnifying Party and pay to the Indemnifying Party the extent of the value of the benefit to the Indemnified Party of that mitigation (less the Indemnified Party’s reasonable costs of mitigation) within two Business Days after the benefit is received.

(c)Each Indemnified Party shall use commercially reasonable efforts to collect any amounts available under insurance coverage (other than the R&W Insurance Policy), or from any other Person alleged to be responsible, for any Damages payable under Section 9.02.

Section 9.06.Assignment of Claims. If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 9.02 and the Indemnified Party could have recovered all or a part of such Damages from a third party (a “Potential Contributor”) based on the underlying Claim asserted against the Indemnifying Party, the Indemnified Party shall assign such of its rights to proceed against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment.

Section 9.07.Exclusivity. After the Closing, Buyer and Seller acknowledge and agree that the sole and exclusive remedy with respect to any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated by this Agreement is pursuant to Article 9 and Section 11.17 (other than claims with respect to the determination of the adjustment to the Purchase Price, as applicable, which shall be resolved in accordance with Section 2.09). Nothing in this Section 9.07 shall limit any Person’s right to seek specific performance or shall apply to claims arising from fraud.

Section 9.08.R&W Insurance Policy.

(a)The parties acknowledge and agree that Buyer is acquiring the R&W Insurance Policy in connection with the consummation of the transactions contemplated hereby, and Buyer has provided to Seller a true and complete copy of the form of the binders for the R&W Insurance Policy. Notwithstanding anything in this Agreement to the contrary but subject in all events to the last sentence of Section 9.01 hereof, Buyer acknowledges and agrees, on behalf of itself and its Affiliates, that after the Cut-Off Date (i) neither Seller nor any of its Affiliates shall have any liability for any breach or inaccuracy of any representation or warranty contained in this Agreement and (i) each of Buyer and its Affiliates’ only recourse in the event of any breach or inaccuracy of any representation or warranty shall be to file a claim under the R&W Insurance Policy.

(b)Without limiting Section 9.08(a), Buyer agrees (on behalf of itself and each of its Affiliates) that (i) none of Seller or any of its Affiliates shall have any liability whatsoever for or under the R&W Insurance Policy (including, except as set forth in Section 11.06, for any premiums or other amounts payable in respect thereof); (i) the R&W Insurance Policy shall at all times provide that the insurer thereunder (A) waives and agrees not to pursue, directly or indirectly, any subrogation rights against Seller or its Affiliates except in cases of fraud by the Seller in connection with this Agreement and the transactions contemplated hereby and (A) agrees that none of Buyer or any of its Affiliates shall have any obligation to pursue any claim against Seller or its Affiliates after the Cut-Off Date (subject to the last sentence of Section 9.01 hereof) and (i) except as otherwise provided herein, the absence of coverage under the R&W Insurance Policy for any reason, including due to exclusions from coverage thereunder or the failure of the R&W Insurance Policy to be in full force and effect for any reason, shall not expand, alter, amend, change or otherwise affect Seller’s liability under this Agreement.

Section 9.09.Purchase Price Adjustment and Allocation of Payments. Any amount paid by Seller or Buyer under this Article 9 will be treated as an adjustment to the Purchase Price, unless otherwise required by Applicable Law.

ARTICLE 10TERMINATION

Section 10.01.Grounds for Termination. This Agreement may be terminated at any time prior to the Closing:

(a)by mutual written agreement of Seller and Buyer;

(b)by either Seller or Buyer if the Closing shall not have been consummated on or before August 31, 2018 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 10.01(b) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated on or before such date;

(c)by either Seller or Buyer if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any Governmental Authority having competent jurisdiction, or there is any Applicable Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited;

(d)by Buyer (if it is not in material breach of its representations, warranties, covenants or agreements under this Agreement so as to cause any of the conditions set forth in Sections 8.01 or 8.03 not to be satisfied), upon written notice to Seller, if there has been a material violation, breach or inaccuracy of any representation, warranty, covenant or agreement of Seller contained in this Agreement, which violation, breach or inaccuracy would cause any of the conditions set forth in Sections 8.01 or 8.02 not to be satisfied, and such violation, breach or inaccuracy has not been waived by Buyer (or cured by Seller) within 20 Business Days after receipt by Seller of written notice thereof from Buyer or is not reasonably capable of being cured prior to the Outside Date; or

(e)by Seller (if it is not in material breach of its representations, warranties, covenants or agreements under this Agreement so as to cause any of the conditions set forth in Sections 8.01 or 8.02 not to be satisfied), upon written notice to Buyer, if there has been a material violation, breach or inaccuracy of any representation, warranty, agreement or covenant of Buyer contained in this Agreement, which violation, breach or inaccuracy would cause any of the conditions set forth in Sections 8.01 or 8.03 not to be satisfied, and such violation, breach or inaccuracy has not been waived by Seller (or cured by Buyer) within 20 Business Days after receipt by Buyer of written notice thereof from Seller or is not reasonably capable of being cured prior to the Outside Date.

Other than in the case of Section 10.01(a), the party desiring to terminate this Agreement pursuant to this Section 10.01 shall give notice of such termination to the other parties.

Section 10.02.Effect of Termination. If this Agreement is terminated as permitted by Section 10.01, such termination shall be without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other parties to this Agreement; provided that if such termination shall result from the willful (i) failure of any party to fulfill a condition to the performance of the obligations of any other party or (i) failure of any party to perform a covenant of this Agreement, such party shall be fully liable for any and all damages incurred or suffered by any other party as a result of such failure or breach. The provisions of Sections 7.05, 10.02, 11.07, 11.09, 11.10 and 11.11 shall survive any termination hereof pursuant to Section 10.01.

ARTICLE 11MISCELLANEOUS

Section 11.01.Notices. All notices, requests and other communications to any party hereunder shall be in writing (including electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given,

if to Buyer, to:

360TGTX Inc.
Mergenthalerallee 61
65760 Eschborn
Germany

Attention: Dr. Michael Lappe
E-mail: Michael.Lappe@deutsche-boerse.com

with a copy (which shall not constitute notice to Buyer) to:

Allen & Overy LLP
1221 Avenue of the Americas
New York, NY 10020
Attention: Eric Shube
E-mail: eric.shube@allenovery.com

if to Seller, to:

GAIN Capital Holdings, Inc.
135 U.S. Hwy 202/206
Bedminster One, Suite 11
Bedminster, NJ 07921Attention: Diego Rotsztain
E-mail: drotsztain@gaincapital.com

with a copy (which shall not constitute notice to Seller) to:

Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
Attention: Leonard Kreynin
E-mail: leonard.kreynin@davispolk.com

or such other address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.

Section 11.02.Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege. (a) Buyer waives and will not assert any conflict of interest arising out of or relating to the representation, after the Closing (the “Post-Closing Representation”), of Seller or any Affiliate, officer, employee or director of Seller (any such Person, a “Designated Person”) in any matter involving this Agreement or any other agreements or transactions contemplated thereby, by any legal counsel currently representing Seller in connection with this Agreement or any other agreements or transactions contemplated thereby, including Davis Polk & Wardwell LLP (the “Current Representation”).

(a)Buyer waives and will not assert any attorney-client privilege with respect to any communication between any legal counsel and any Designated Person occurring during the Current Representation, including in connection with a dispute with Buyer, it being the intention of the parties hereto that all such rights to such attorney-client privilege and to control such attorney-client privilege shall be retained by such Designated Person.

Section 11.03.Release. Each of the parties hereto, effective immediately following the Closing, with the intention of binding such party and each of its Affiliates, heirs, executors, administrators and assigns (collectively, the “Releasors”), releases, acquits and forever discharges the other party hereto and its Affiliates (the “Releasees”), of and from any and all manner of actions, liabilities, damages or losses of any nature whatsoever, known or unknown, suspected or unsuspected, fixed or contingent, direct, derivative, vicarious or otherwise, whether based in contract, tort, or other legal, statutory, or equitable theory of recovery, each as though fully set forth at length herein (other than claims of, or causes of action resulting from, intentional and actual fraud as to a material fact on which Buyer reasonably relied, it being stipulated and agreed that as of the date hereof nothing has come to the attention of any Releasor to cause such Releasor to believe that any Releasee has committed any fraudulent act, and as a result no Releasor has any intention of bringing, nor does it believe that it would have a basis to bring, a claim of fraud based solely on facts disclosed to or discovered by such Releasor prior to the date hereof) (hereinafter, a “Released Claim”), which the Releasors now have or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, act, omission or thing whatsoever existing or occurring prior to the Closing to the extent arising out of, based upon, or relating to the Business or any actions taken or failed to be taken by any of the Releasees in any capacity related to or affecting the Business; provided, however, that nothing set forth in this Section 11.03 shall constitute a release of any rights or obligations of any nature arising under this Agreement or any other Transaction Document, including with respect to any covenant requiring performance after Closing, or affect the ability of either party hereto to bring a Released Claim under this Agreement or any other Transaction Document.

Section 11.04.Amendments and Waivers. (a) Any provision of this Agreement may be (i) amended, if such amendment is in writing and is signed by Buyer and Seller, and (ii) waived, if such waiver is in writing and is signed by the waiving parties.

(a)No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as set forth in Section 9.07, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 11.05.Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with transactions contemplated by this Agreement (including any real property transfer Tax and any similar Tax) shall be borne and paid by Buyer, and Buyer will, at its own expense, file all necessary Returns and other documentation with respect to all similar Taxes and fees, and, if required by applicable law, Seller will, and will cause its Affiliates to, join in the execution of any such Returns and other documentation.

Section 11.06.Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided that Buyer shall be responsible for any deposits, premiums or other amounts payable in respect of the R&W Insurance Policy.

Section 11.07.Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 11.08.Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state other than Section 5-1401 of the General Obligations Law.

Section 11.09.Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 11.01 shall be deemed effective service of process on such party.

Section 11.10.WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.10.

Section 11.11.Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.

Section 11.12.Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 11.13.Bulk Sales Laws. Buyer and Seller each hereby waive compliance by Seller with the provisions of the “bulk sales,” “bulk transfer” or similar laws of any state.

Section 11.14.Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 11.15.Disclosure Schedules. Seller has set forth information on the Seller Disclosure Schedules in a section thereof that corresponds to the section of this Agreement to which it relates. A matter set forth in one section of the Seller Disclosure Schedules need not be set forth in any other section so long as its relevance to such other section of the Seller Disclosure Schedules or section of the Agreement is reasonably apparent on the face of the information disclosed thereon to the Person to which such disclosure is being made. The parties acknowledge and agree that (a) the Seller Disclosure Schedules may include certain items and information solely for informational purposes for the convenience of Buyer and (a) the disclosure by any Seller of any matter in the Seller Disclosure Schedules shall not be deemed to constitute an acknowledgment by Seller that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.

Section 11.16.Guaranty. (a) Deutsche Börse AG  (“Guarantor”)  hereby unconditionally and irrevocably guarantees to Seller (i) the due and punctual payment and performance of each of the obligations owing by Buyer under this Agreement if, as and when such obligations become due and (ii) the due and punctual payment of all Damages incurred by Seller resulting from the breach or default by Buyer of any of the provisions of this Agreement, including, for the avoidance of doubt, all Damages covered by the indemnity provided under Article 9 (collectively, the “Buyer Obligations”).

(a)In connection with a termination (in whole or in part) of this Agreement pursuant to Article 10, Guarantor’s obligations under this Section11.16 shall terminate.  For the avoidance of doubt, the guarantee under this Section11.16 shall continue to apply to all those Buyer Obligations surviving a termination (in whole or in part) of this Agreement pursuant to Article 10.

(b)Guarantor hereby agrees that its obligations under this Section11.16 shall be unconditional, irrespective of (i) the absence of any action to enforce Buyer Obligations against Buyer, (ii) any amendment, waiver or consent by Buyer with respect to any provision thereof, (iii) the liquidation, dissolution or winding up Buyer, or (iv) any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.  Guarantor hereby waives promptness, diligence, presentment, demand of payment, filings of claims with any court, any right to require a proceeding first against Buyer, protest or notice with respect to the applicable Buyer Obligation and all demands whatsoever, and covenants that Guarantor’s obligations under this Section11.16 will not be discharged except by complete performance of the applicable Buyer Obligations and the obligations under this Section11.16 in accordance with the terms thereof and hereof, respectively.

(c)Guarantor shall be subrogated to all rights against Buyer in respect of any amounts paid by Guarantor pursuant to the provisions of this Section11.16.

(d)The obligations of Guarantor under this Section11.16 constitute a guarantee of payment and performance when due and not of collection.  Buyer Obligations of Guarantor under this Section11.16 shall continue to be effective, or to be reinstated, as the case may be, in respect of any Buyer Obligations if at any time payment, or any part thereof, of said Buyer Obligations is rescinded or must otherwise be restored or returned by Seller, all as though such payments had not been made.

(e)For the avoidance of doubt, the term “Buyer” as used in this Section 11.16 includes any successor or assign of Buyer.

(f)Notwithstanding anything to the contrary in this Section11.16, Guarantor shall have no obligation to pay any obligation of Buyer arising under Article 9 hereof if Buyer would not have been obligated to pay such obligation under the terms of Article 9.

(g)To the extent that Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, Guarantor hereby irrevocably (i) waives such immunity in respect of its obligations with respect to this Agreement, and (ii) submits to the personal jurisdiction of any court described in Section11.09.

Section 11.17.Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof. The parties acknowledge and agree that (a) Buyer shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by Seller or to enforce specifically the performance of the terms and provisions hereof by Seller and (a) Seller shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by Buyer or to enforce specifically the performance of the terms and provisions hereof by Buyer, in each case, in the United States District Court for the Southern District of New York or any New York State court sitting in the Borough of Manhattan, New York City, in addition to any other remedy to which such parties are entitled at law or in equity.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

360TGTX INC.
By:	/s/ Carlo Koelzer
	Name:	Carlo Koelzer
	Title:	President

GAIN CAPITAL HOLDINGS, INC.
By:	/s/ Glenn Stevens
	Name:	Glenn Stevens
	Title:	Chief Executive Officer

Solely for purposes of Section 11.16 hereof:

DEUTSCHE BÖRSE AG
By:	/s/ Andreas PreuB
	Name:	Andreas PreuB
	Title:	Deputy Chief Executive Officer

By:	/s/ Gregor Pottmeyer
	Name:	Gregor Pottmeyer
	Title:	Chief Financial Officer

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Glenn H. Stevens, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 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: August 9, 2018	/s/ Glenn H. Stevens
	Glenn H. Stevens
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Nigel Rose, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 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: August 9, 2018	/s/ Nigel Rose
	Nigel Rose
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER,

AS REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Glenn H. Stevens, the undersigned Chief Executive Officer and President of GAIN Capital Holdings, Inc., a Delaware corporation (the “Company”) hereby certify pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that to my knowledge:

1. The accompanying quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2018 (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.

Date: August 9, 2018	/s/ Glenn H. Stevens
	Glenn H. Stevens
	Chief Executive Officer and President
	(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER,

AS REQUIRED BY SECTION 906 THE SARBANES-OXLEY ACT OF 2002

I, Nigel Rose, the undersigned Chief Financial Officer of GAIN Capital Holdings, Inc., a Delaware corporation (the “Company”) hereby certify pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that to my knowledge:

1. The accompanying quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2018 (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.

Date: August 9, 2018	/s/ Nigel Rose
	Nigel Rose
	Chief Financial Officer
	(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document Documentand Entity Information [Abstract]
Entity Registrant Name	GAIN Capital Holdings, Inc.
Trading Symbol	GCAP
Entity Central Index Key	0001444363
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		44,642,233

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
ASSETS:
Cash and cash equivalents	$ 360,312	$ 209,688
Cash and cash equivalents held for customers	920,366	978,828
Receivables from brokers	52,335	78,503
Property and equipment, net	36,462	40,742
Intangible assets, net	40,117	61,969
Goodwill	28,182	33,036
Other assets	36,743	45,881
Total assets	1,474,517	1,448,647
Liabilities
Payables to customers	920,366	978,828
Payables to brokers	2,973	2,789
Accrued compensation and benefits	10,623	10,104
Accrued expenses and other liabilities	39,749	33,947
Income tax payable	10,154	599
Convertible senior notes	135,289	132,221
Total liabilities	1,119,154	1,158,488
Commitments and contingent liabilities
Redeemable non-controlling interests	2,562	4,411
Shareholders’ equity
Common stock ($0.00001 par value; 120 million shares authorized, 54,323,940 shares issued and 44,755,615 shares outstanding as of June 30, 2018; 120 million shares authorized, 53,612,340 shares issued and 45,152,299 shares outstanding as of December 31, 2017)	0	0
Additional paid-in capital	239,745	235,659
Retained earnings	199,683	122,686
Accumulated other comprehensive loss	(21,353)	(15,670)
Treasury stock, at cost (9,568,325 shares at June 30, 2018 and 8,460,041 at December 31, 2017)	(65,274)	(56,927)
Total shareholders’ equity	352,801	285,748
Total liabilities and shareholders’ equity	$ 1,474,517	$ 1,448,647

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	54,323,940	53,612,340
Common stock, shares outstanding (in shares)	44,755,615	45,152,299
Treasury stock, shares (in shares)	9,568,325	8,460,041

XML

Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
REVENUE:
Total non-interest revenue	$ 81,750	$ 89,466	$ 178,410	$ 139,988
Interest revenue	2,827	1,261	4,901	2,082
Interest expense	392	136	766	299
Total net interest revenue	2,435	1,125	4,135	1,783
Net revenue	84,185	90,591	182,545	141,771
EXPENSES:
Employee compensation and benefits	22,473	23,011	46,811	43,534
Selling and marketing	6,767	7,517	12,737	16,752
Referral fees	10,464	13,312	21,895	29,753
Trading expenses	5,541	4,863	11,352	10,334
General and administrative	14,228	11,835	26,692	21,064
Depreciation and amortization	5,341	4,121	10,709	7,949
Purchased intangible amortization	3,612	3,817	7,280	6,883
Communications and technology	5,495	4,497	10,886	9,526
Bad debt provision	282	(166)	1,400	(94)
Restructuring expenses	25	0	25	0
Impairment of investment	0	0	(130)	0
Total operating expense	74,228	72,807	149,657	145,701
OPERATING PROFIT/(LOSS)	9,957	17,784	32,888	(3,930)
Interest expense on long term borrowings	3,388	2,694	6,728	5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE/(BENEFIT)	6,569	15,090	26,160	(9,289)
Income tax (benefit)/expense	(263)	1,533	7,413	(4,401)
Equity in net loss of affiliate	0	(34)	0	(54)
Net income/(loss) from continuing operations	6,832	13,523	18,747	(4,942)
Income from discontinued operations, including gain on sale of $69,581, net of income tax of $9,806	60,642	569	64,988	248
NET INCOME/(LOSS)	67,474	14,092	83,735	(4,694)
Less income attributable to non-controlling interest	326	153	501	238
NET INCOME/(LOSS) APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.	67,148	13,939	83,234	(4,932)
Other comprehensive income:
Foreign currency translation adjustment	(15,157)	7,761	(5,683)	12,300
COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.	$ 51,991	$ 21,700	$ 77,551	$ 7,368
Earnings/(loss) per common share:
Basic earnings/(loss) from continuing operations (usd per share)	$ 0.13	$ 0.30	$ 0.39	$ (0.09)
Basic earnings from discontinued operations (usd per share)	1.36	0.01	1.45	0.01
Basic (usd per share)	1.49	0.31	1.84	(0.08)
Diluted earnings/(loss) from continuing operations (usd per share)	0.13	0.30	0.38	(0.09)
Diluted earnings from discontinued operations (usd per share)	1.34	0.01	1.43	0.01
Diluted (usd per share)	$ 1.47	$ 0.31	$ 1.81	$ (0.08)
Weighted average common shares outstanding used in computing earnings/(loss) per common share:
Basic (shares)	44,797,103	47,687,214	44,906,800	47,790,307
Diluted (shares)	45,309,002	47,894,648	45,415,774	47,790,307
Retail revenue
REVENUE:
Revenue from contract with customer	$ 72,032	$ 79,079	$ 156,152	$ 118,010
Futures revenue
REVENUE:
Revenue from contract with customer	11,129	9,565	21,774	20,145
Other (loss)/revenue
REVENUE:
Revenue from contract with customer	$ (1,411)	$ 822	$ 484	$ 1,833

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Condensed Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
BEGINNING BALANCE (in shares) at Dec. 31, 2016		48,220,243
BEGINNING BALANCE at Dec. 31, 2016	$ 294,182	$ 0	$ (30,767)	$ 218,392	$ 143,399	$ (36,842)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) applicable to Gain Capital Holdings, Inc.	(4,932)				(4,932)
Exercise of options (in shares)		82,774
Exercise of options	335			335
Conversion of restricted stock into common stock (in shares)		510,793
Issuance of common stock for the employee stock purchase plan (in shares)		64,546
Issuance of common stock for the employee stock purchase plan	402			402
Purchase of treasury stock (in shares)		(1,373,685)
Purchase of treasury stock	(9,426)		(9,426)
Shares withheld for net settlements of share-based awards (in shares)		(55,190)
Shares withheld for net settlements of share-based awards	(381)		(381)
Share-based compensation	2,856			2,856
Adjustment to fair value of redeemable non-controlling interests	983				983
Dividends declared	(5,774)				(5,774)
Foreign currency translation adjustment	12,300					12,300
ENDING BALANCE (in shares) at Jun. 30, 2017		47,449,481
ENDING BALANCE at Jun. 30, 2017	290,545	$ 0	(40,574)	221,985	133,676	(24,542)
BEGINNING BALANCE (in shares) at Dec. 31, 2017		45,152,299
BEGINNING BALANCE at Dec. 31, 2017	285,748	$ 0	(56,927)	235,659	122,686	(15,670)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) applicable to Gain Capital Holdings, Inc.	83,234				83,234
Exercise of options (in shares)		84,500
Exercise of options	587			587
Conversion of restricted stock into common stock (in shares)		585,565
Conversion of restricted stock into common stock	0
Issuance of common stock for the employee stock purchase plan (in shares)		41,535
Issuance of common stock for the employee stock purchase plan	314			314
Purchase of treasury stock (in shares)		(1,098,880)
Purchase of treasury stock	(8,271)		(8,271)
Shares withheld for net settlements of share-based awards (in shares)		(9,404)
Shares withheld for net settlements of share-based awards	(76)		(76)
Share-based compensation	3,185			3,185
Adjustment to fair value of redeemable non-controlling interests	(890)				(890)
Dividends declared	(5,347)				(5,347)
Foreign currency translation adjustment	(5,683)					(5,683)
ENDING BALANCE (in shares) at Jun. 30, 2018		44,755,615
ENDING BALANCE at Jun. 30, 2018	$ 352,801	$ 0	$ (65,274)	$ 239,745	$ 199,683	$ (21,353)

XML

Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$ 67,474	$ 14,092	$ 83,735	$ (4,694)
Adjustments to reconcile net income/(loss) to cash (used in)/provided by operating activities
Loss/(gain) on foreign currency exchange rates			950	(96)
Depreciation and amortization			19,271	16,315
Deferred tax (benefit)/expense			(1,227)	622
Amortization of deferred financing costs			324	221
Bad debt provision/(recovery)	282	(166)	1,400	(94)
Convertible senior notes discount amortization			2,743	2,289
Share-based compensation			3,185	2,856
Equity in net loss of affiliate	0	34	0	54
Gain on sale of GTX			(69,581)	0
Changes in operating assets and liabilities:
Receivables from brokers			25,687	(20,037)
Other assets			3,055	518
Payables to customers			(67,826)	(20,183)
Payables to brokers			192	0
Accrued compensation and benefits			(2,056)	(4,891)
Accrued expenses and other liabilities			2,822	(6,176)
Income tax payable			9,345	(2,699)
Net cash provided by/(used in) operating activities			12,019	(35,995)
Cash provided by/(used in) operating activities - continuing operations			8,233	(24,521)
Cash used in operating activities - discontinued operations			3,786	(11,474)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(8,736)	(10,182)
Proceeds from sale of GTX			96,764	0
Acquisition of FXCM assets			0	(6,960)
Net cash provided by/(used in) investing activities			88,028	(17,142)
Cash used in investing activities - continuing operations			(7,891)	(16,806)
Cash provided by/(used in) investing activities - discontinued operations			95,919	(336)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			587	335
Proceeds from employee stock purchase plan			314	402
Purchase of treasury stock			(8,347)	(9,807)
Dividend payments			(5,347)	(5,774)
Distributions to non-controlling interest holders			(199)	(873)
Net cash used in financing activities			(12,992)	(15,717)
Effect of exchange rate changes on cash and cash equivalents			5,107	29,091
NET INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH			92,162	(39,763)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period			1,188,516	1,180,228	$ 1,180,228
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	1,280,678	1,140,465	1,280,678	1,140,465	1,188,516
Cash and cash equivalents						$ 360,312	$ 209,688	$ 193,137
Cash and cash equivalents held for customers						920,366		947,328
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	1,280,678	1,140,465	1,188,516	1,180,228	$ 1,180,228	$ 1,280,678	$ 1,188,516	$ 1,140,465
Cash (paid)/received during the year for:
Interest			(4,346)	(3,148)
Income taxes			(3,040)	(4,386)
Non-cash financing activities:
Adjustment to redemption value of non-controlling interests	$ (523)	$ 915	$ (890)	$ 983

XML

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

GAIN Capital Holdings, Inc. (together with its subsidiaries, the “Company”), is a Delaware corporation formed and incorporated on March 24, 2006. GAIN Holdings, LLC is a wholly-owned subsidiary of GAIN Capital Holdings, Inc., and owns all outstanding membership units of GAIN Capital Group, LLC (“Group, LLC”), the Company’s primary regulated entity in the United States. GAIN Capital Holdings Ltd. is the holding company of the Company’s primary regulated entity in the United Kingdom.

The Company is a global provider of trading services and solutions, specializing in over-the-counter, or OTC, and exchange-traded markets. The Company operates its business in two segments. Through its retail segment, the Company provides its retail customers around the world with access to a diverse range of global financial markets, including spot forex, precious metals, as well as spread bets and contracts for difference, or CFDs, on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products, as well as OTC options. The Company’s futures segment offers execution and risk management services for exchange-traded products on major U.S. and European exchanges, including Bitcoin. For more information about the Company’s segments, please see Note 19.

Group, LLC is a retail foreign exchange dealer (“RFED”) and a Futures Commission Merchant (“FCM”) registered with the Commodity Futures Trading Commission (the “CFTC”). As such, it is subject to the regulations of the CFTC, an agency of the U.S. government, and the rules of the National Futures Association (“NFA”), an industry self-regulatory organization.

GAIN Capital UK Limited ("GCUK") is registered in the United Kingdom (“U.K.”) and regulated by the Financial Conduct Authority (“FCA”) as a full scope €730k IFPRU Investment Firm.

Sale of GTX ECN Business

On June 29, 2018, the Company completed the sale of the GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse Group via its FX unit, 360T, for a total purchase price of $100 million subject to a customary working capital adjustment. The Company determined that the institutional segment met the discontinued operations criteria set forth in Accounting Standards Codification (ASC) Subtopic 205-20-45, Presentation of Financial Statements, in the quarter ended June 30, 2018. As such, the institutional segment results have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For more information relating to the discontinued operations of the Company's GTX ECN business, please see Note 3.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements for the interim periods. The financial statements are presented in accordance with accounting principles generally accepted in the United States of America. The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the Securities and Exchange Commission's ("SEC") regulations for interim financial statements, and, in accordance with SEC rules, omit or condense certain information and footnote disclosures. Results for the interim periods are not necessarily indicative of results to be expected for any other interim period or for the full year. These financial statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, after the elimination of inter-company transactions and balances.

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ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2018

Accounting Changes and Error Corrections [Abstract]

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS

Recently Adopted

In January 2017, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2) from the goodwill impairment test. Instead, an impairment charge will equal the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the amount of goodwill allocated to the reporting unit. The guidance will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted after January 1, 2017. The Company has adopted this ASU as of January 1, 2018, and will apply Step 2 going forward to the extent it is required.

In November 2016, the FASB issued ASU No. 2016-18, “Restricted Cash,” which requires that companies present cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents (restricted cash) when reconciling beginning-of-period and end-of-period totals on the Statement of Cash Flows. The Company has retrospectively adopted this ASU as of January 1, 2018 and includes cash and cash equivalents held for customers as restricted cash. As a result, Net cash used in operating activities on the Statement of Cash Flows increased by $20.2 million for the six months ended June 30, 2017.

The Company defines restricted cash to include cash and cash equivalents held for customers, which represents cash and other highly liquid assets held to fund customer liabilities in connection with trading positions. Included in this balance are funds deposited by customers and funds accruing to customers as a result of trades or contracts. The Company records a corresponding liability in connection with this amount in Payables to customers. In addition, the Company holds certain customer funds in segregated or secured broker accounts. Legally segregated balances are not available for general use, in accordance with certain jurisdictional regulatory requirements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of revenue falls under ASC Topic 825, Financial Instruments, which is excluded from the scope of the new guidance. The Company adopted ASU No. 2014-09 using the modified retrospective approach. See Note 4 Revenue Recognition for additional disclosure.

Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220),” to address certain income tax effects in Accumulated Other Comprehensive Income (AOCI) resulting from the tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within AOCI to retained earnings in the period in which the effect of the tax reform is recorded. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods. Early adoption is permitted. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

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DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On June 29, 2018, the Company completed the sale of its GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse via its FX unit, 360T, for a total purchase price of $100 million, subject to a customary working capital adjustment.

The Company recorded a gain of $69.6 million on the sale of the GTX business subject to the final working capital adjustment between the parties.

The Company determined that the sale of the GTX business qualifies as a discontinued operation under the criteria set forth in Accounting Standards Codification 205-20-45, Presentation of Financial Statements and the Company does not have any significant continuing involvement in these operations.

The results of operations from the discontinued segment for the three and six months endedJune 30, 2018 are as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
REVENUE:
Institutional revenue	$	7,923		$	7,435		$	16,379		$	15,802
Other revenue	(2		)	—			(2		)	—
Total non-interest revenue	7,921			7,435			16,377			15,802
Interest revenue	55			28			103			48
Total net interest revenue	55			28			103			48
Net revenue	$	7,976		$	7,463		$	16,480		$	15,850
EXPENSES:
Employee compensation and benefits	$	2,466		$	3,314		$	5,879		$	7,006
Trading expenses	2,782			2,315			5,439			4,911
Other expenses	1,861			1,804			3,924			3,183
Total operating expense	7,109			7,433			15,242			15,100
OPERATING PROFIT	867			30			1,238			750
Gain on sale of discontinued operations	69,581			—			69,581			—
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)	70,448			30			70,819			750
Income tax expense/(benefit)	9,806			(539		)	5,831			502
NET INCOME FROM DISCONTINUED OPERATIONS	$	60,642		$	569		$	64,988		$	248

Since the sale of the GTX ECN business closed on June 29, 2018, there are no assets held for sale as of June 30, 2018. As of December 31, 2017, total assets of $28.5 million and total liabilities of $3.8 million were related to the discontinued segment.

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REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of the Company's retail revenue as well as interest revenue falls under ASC Topic 825, “Financial Instruments”, which is excluded from the scope of Topic 606. Additionally, the Company’s futures segment revenue was not materially impacted as the satisfaction of performance obligations under the new guidance is materially consistent with the Company’s previous revenue recognition policies. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis.

Similarly, the amended guidance did not have a material impact on the recognition of costs incurred to obtain new contracts. As a result of the adoption of the new guidance, the Company recorded a gross up of $0.5 million and $1.0 million for the three and six months ended June 30, 2018, respectively, which impacted referral fee expense in the Company's discontinued operations. The Company adopted ASU No. 2014-09 using the modified retrospective approach.

Under ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to customers in exchange for an amount that reflects the consideration the Company expects to be entitled to in transferring those goods or services. The following is a description of the Company’s revenue recognition policies as they relate to revenue from contracts with customers.

Futures Revenue

Futures revenue comprises primarily commissions earned on futures and futures options trades. We act as an agent for the trades executed in our futures segment and are not exposed to market risk in connection with that activity. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s futures revenue performance obligations also consist of trade execution and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date.

Disaggregation of Revenues

The following table presents the Company’s revenue from contracts with customers disaggregated by the services described above for the futures segment for the three and six months ended June 30, 2018:

	Three months ended June 30, 2018		Six months ended June 30, 2018
Futures
Direct Customers (1)	$	2,693	$	5,166
Indirect Customers (2)	$	6,555	$	13,583
Other	$	2,852	$	4,842
Total Segment Revenue	$	12,100	$	23,591

(1) Direct customers are all customers not classified as indirect

(2) Indirect customers are referred to the Company by introducing brokers

Contract Assets and Contract Liabilities

The timing of revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received, prior to the time at which the service obligation is satisfied.

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FAIR VALUE MEASUREMENT

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

FAIR VALUE INFORMATION

Fair value is defined as the price that would be received in exchange for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. Generally Accepted Accounting Principles ("US GAAP") establishes a three level hierarchy that ranks the quality and reliability of information used in developing fair value estimates for financial instruments. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of fair value hierarchy are summarized below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 - Valuations that require inputs that are both unobservable to a market participant and significant to the fair value measurement.

For assets and liabilities that are transferred between levels during the period, fair values are ascribed as if the assets or liabilities had been transferred as of the beginning of the period.

The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis during the reporting period and the related hierarchy levels (amounts in thousands):

	Fair Value Measurements on a Recurring Basis as of June 30, 2018
	Level 1		Level 2			Level 3		Total
Financial Assets/(Liabilities):
Cash and cash equivalents:
Money market accounts	$	252,311	$	—		$	—	$	252,311
Cash and cash equivalents held for customers:
US treasury bills: U.S. government and agency securities	103,891		—			—		103,891
Receivable from brokers:
Broker derivative contracts	—		(10,391		)	—		(10,391		)
Other assets:
Certificates of deposit	176		—			—		176
Other	125		—			—		125
Payables to customers:
Customer derivative contracts	—		124,807			—		124,807
Payables to brokers:
Broker derivative contracts	—		2,482			—		2,482
Total	$	356,503	$	116,898		$	—	$	473,401

	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 cash equivalents 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

The Company has not changed its valuation approaches or techniques in measuring the fair value of any financial assets and liabilities during the six months ended June 30, 2018, nor has there been any movement between levels during the period.

Level 1 Financial Assets

The Company has U.S. Treasury bills, money market accounts and certificates of deposit that are Level 1 financial instruments that are recorded based upon listed or quoted market rates. The U.S. Treasury bills and money market accounts are recorded in Cash and cash equivalents and Cash and cash equivalents held for customers and the certificates of deposit are recorded in Other Assets.

Level 2 Financial Assets and Liabilities

The Company has customer derivative contracts that are Level 2 financial instruments recorded in Payables to customers.

The Company has broker derivative contracts that are Level 2 financial instruments recorded in Receivables from brokers and Payables to brokers.

The fair values of these Level 2 financial instruments are based upon directly observable values for underlying instruments.

Level 3 Financial Liabilities

The Company did not have any Level 3 Financial Assets or Liabilities on June 30, 2018 or December 31, 2017.

Financial Instruments Not Measured at Fair Value

The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value in the condensed consolidated balance sheets (amounts in thousands).

Receivables from brokers comprise open trades, which are measured at fair value (disclosed above), and the Company’s posted funds with brokers that are required as collateral for holding trading positions, which are not measured at fair value but approximate fair value. These deposits approximate fair value because they are cash balances that the Company may withdraw at its discretion. Settlement would be expected to occur within a relatively short period of time once a withdrawal is initiated.

Payables to customers comprise open trades, which are measured at fair value (disclosed above), and customer deposits that the Company holds for its role as clearing broker. These deposits are not measured at fair value, but approximate fair value, because they are cash balances that the Company or its customers can settle at either party’s discretion. Such settlement would occur within a relatively short period of time once a withdrawal is initiated.

Payables to brokers comprise open trades, which are measured at fair value (disclosed above) and cash due to brokers. The cash within this balance is not measured at fair value but does approximate fair value, because it is immediately payable to the brokers. Settlement with brokers generally occurs either on the same or next business day following a margin call.

The carrying value of Convertible senior notes represents the notes’ principal amounts net of unamortized discount (refer to Note 14). The Company assessed the notes’ fair value as determined by current Company-specific and risk free interest rates as of the balance sheet date.

	As of June 30, 2018				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	$	62,726	$	62,726	$	—	$	62,726	$	—
Financial Liabilities:
Payables to customers	$	1,045,173	$	1,045,173	$	—	$	1,045,173	$	—
Payable to brokers	$	5,455	$	5,455	$	—	$	5,455	$	—
Convertible senior notes	$	135,289	$	179,847	$	—	$	179,847	$	—

	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	$	—

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DERIVATIVES

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

The Company’s contracts with its customers and its liquidity providers are deemed to be derivative instruments. The table below represents the fair values of the Company’s derivative instruments reported within Receivables from brokers, Payables to customers and Payables to brokers on the accompanying Condensed Consolidated Balance Sheets (amounts in thousands):

	June 30, 2018
	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	$	105,405		$	(23,079	)	$	82,326
CFD contracts	91,411			(60,328		)	31,083
Metals contracts	6,363			(2,874		)	3,489
Total	$	203,179		$	(86,281	)	$	116,898
	June 30, 2018
	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	$	62,726		$	(10,391	)	$	52,335
Payables to customers	$	(1,045,173	)	$	124,807		$	(920,366	)
Payable to brokers	$	(5,455	)	$	2,482		$	(2,973	)

	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	)

The Company’s derivatives include different underlyings which vary in price. Foreign exchange contracts typically have prices less than two dollars, while certain metals contracts and CFDs can have considerably higher prices. The amounts reported within Receivables from brokers, Payables to customers, and Payables to brokers on the Consolidated Balance Sheets are derived from the number of contracts below (amounts in thousands):

	June 30, 2018
	Total contracts in long positions	Total contracts in short positions
Derivative Instruments:
Foreign currency exchange contracts	3,019,520	3,598,235
CFD contracts	115,947	168,033
Metals contracts	485	120
Total	3,135,952	3,766,388

	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

The Company did not designate any of its derivatives as hedging instruments. Net gains with respect to derivative instruments reflected in Retail revenue in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months endedJune 30, 2018 and June 30, 2017 were as follows (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Derivative Instruments:
Foreign currency exchange contracts	$	51,579	$	43,633	$	92,830	$	61,009
CFD contracts	14,681		26,422		51,828		53,213
Metals contracts	5,759		9,018		11,481		3,782
Total	$	72,019	$	79,073	$	156,139	$	118,004

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RECEIVABLES FROM BROKERS

6 Months Ended

Jun. 30, 2018

Brokers and Dealers [Abstract]

RECEIVABLES FROM BROKERS

RECEIVABLES FROM BROKERS

The Company has posted funds with brokers as collateral required by agreements for holding trading positions. These amounts are reflected as Receivables from brokers on the Condensed Consolidated Balance Sheets.

Amounts receivable from brokers consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Required collateral	$	62,726		$	73,537
Open foreign exchange positions	(10,391		)	4,966
Total	$	52,335		$	78,503

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment, including leasehold improvements and capitalized software development costs, consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Software	$	59,713		$	57,047
Computer equipment	18,964			18,390
Leasehold improvements	10,963			11,068
Telephone equipment	642			643
Office equipment	2,048			2,110
Furniture and fixtures	3,544			3,592
Web site development costs	635			386
Gross property and equipment	96,509			93,236
Less: Accumulated depreciation and amortization	(60,047		)	(52,494		)
Property and equipment, net	$	36,462		$	40,742

Depreciation and amortization expense for property and equipment was $5.3 million and $4.1 million for the three months ended June 30, 2018 and 2017, respectively, and $10.7 million and $7.9 million for the six months ended June 30, 2018 and 2017, respectively.

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INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The Company’s various intangible assets consisted of the following as of (amounts in thousands):

	June 30, 2018							December 31, 2017
Intangibles	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Customer lists	$	59,658	$	(36,210	)	$	23,448	$	60,420	$	(31,698	)	$	28,722
Technology	50,233		(37,273		)	12,960		72,204		(43,270		)	28,934
Trademarks	7,533		(4,187		)	3,346		7,680		(3,730		)	3,950
Total finite lived intangibles	117,424		(77,670		)	39,754		140,304		(78,698		)	61,606
Trademark not subject to amortization (1)	363		—			363		363		—			363
Total intangibles	$	117,787	$	(77,670	)	$	40,117	$	140,667	$	(78,698	)	$	61,969

(1) These indefinite-life trademarks relate to the Forex.com and foreignexchange.com domain names where management determined there was no legal, regulatory or technological limitation on their useful lives. The Company compares the recorded value of the indefinite-life intangible assets to their fair value on an annual basis and whenever circumstances arise that indicate that impairment may have occurred.

The Company had the following identifiable intangible assets and weighted average amortization periods as of June 30, 2018:

Intangible Assets	Amount (in thousands)		Weighted average amortization period
Customer lists	$	59,658	6.9 years
Technology	50,233		8.6 years
Trademarks (1)	7,896		6.7 years
Total intangible assets	$	117,787

(1) Trademarks with an indefinite-life, as described above, comprise $0.4 million of the $7.9 million of trademarks.

Amortization expense for the purchased intangibles was $3.6 million and $3.8 million for the three months ended June 30, 2018 and 2017, respectively, and $7.3 million and $6.9 million for the six months ended June 30, 2018 and 2017, respectively.

On February 7, 2017, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Forex Capital Markets L.L.C. (“FXCM”). Pursuant to the terms of the Purchase Agreement, FXCM transferred substantially all of its U.S.-domiciled customer accounts to the Company effective as of February 24, 2017. The Company paid $7.2 million to FXCM as consideration for the purchased accounts for the full year 2017, which was capitalized and included as an intangible asset and amortized on a straight line basis over its two year useful life.

Goodwill

Goodwill is evaluated for impairment on an annual basis on October 31 and in interim periods when events or changes indicate the carrying value may not be recoverable. As a result of the sale of the GTX ECN business, the Company tested the institutional goodwill for impairment using data as of June 30, 2018 and concluded there was no impairment. The $4.6 million of institutional goodwill was allocated to discontinued operations.

The Company operates under two reporting units: retail and futures. There were no additions or impairments to the carrying value of the Company’s goodwill during the six months ended June 30, 2018.

For the year ended December 31, 2017, the Company performed a qualitative analysis to determine whether it was more likely than not that the fair value of its reporting units was less than their carrying value. As a result of this assessment, the Company determined that it was not necessary to perform a quantitative impairment test and concluded that goodwill assigned to each of its reporting units was not impaired at December 31, 2017.

As of June 30, 2018 and December 31, 2017, the Company had recorded goodwill of approximately $28.2 million and $33.0 million, respectively. The decrease of $4.8 million was primarily related to the discontinued operations of GTX.

The following represents the changes in the carrying amount of goodwill by segment (amounts in thousands):

	Retail			Institutional			Futures			Total
Carrying amount of goodwill as of December 31, 2017	$	25,952		$	4,650		$	2,434		$	33,036
Foreign currency translation adjustments	(186		)	(34		)	(18		)	(238		)
Discontinued operations	—			(4,616		)	—			(4,616		)
Carrying amount of goodwill as of June 30, 2018	$	25,766		$	—		$	2,416		$	28,182

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OTHER ASSETS

6 Months Ended

Jun. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER ASSETS

OTHER ASSETS

Other assets consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Vendor and security deposits	$	6,932		$	11,923
Income tax receivable	282			2,132
Deferred tax assets, net	12,053			10,698
GTX trade receivables	616			5,758
Customer debit positions	4,067			2,384
Allowance on customer debit positions	(3,700		)	(1,959		)
Prepaid assets	8,801			9,523
Miscellaneous receivables	7,248			4,872
Deferred commitment fees	444			550
Total other assets	$	36,743		$	45,881

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Certain officers and directors of the Company have personal funds on deposit in separate customer accounts with the Company. These accounts are recorded in Payables to customers on the Condensed Consolidated Balance Sheets. The aggregate amount of these funds was $0.2 million and $0.2 million at June 30, 2018 and December 31, 2017, respectively.

IPGL Limited, the majority selling shareholder in the acquisition of City Index, has a trading account with the Company which is recorded in Payables to customers on the Condensed Consolidated Balance Sheets. The aggregate amount of these funds was $20.2 million and $15.9 million as of June 30, 2018 and December 31, 2017, respectively. The net revenue generated by any individual related party was not deemed to be material in any period.

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NON-CONTROLLING INTERESTS

6 Months Ended

Jun. 30, 2018

Noncontrolling Interest [Abstract]

NON-CONTROLLING INTERESTS

NON-CONTROLLING INTERESTS

Non-controlling interests

In March 2014, the Company acquired controlling interests in Global Asset Advisors (“GAA”) and Top Third (“TT”). The Company purchased 55% of each entity, and the respective sellers maintained a 45% interest in each entity, subject to immediately exercisable call options for the Company to purchase the remaining interests, as well as put options for the sellers to sell their remaining interests in each entity to the Company that were to become exercisable in 2017. In December 2016, the Company acquired an additional 24% of each entity and, accordingly, the respective sellers now maintain a 21% interest in each entity. In connection with the purchase of these additional interests, the Company and the respective sellers agreed that neither would exercise the call options or put options with respect to the remaining interests prior to December 31, 2017. In December 2017, the Company and the sellers of TT extended their agreement that neither would exercise the relevant call options or put options through December 31, 2018.

In February 2018, the minority owners of GAA notified the Company that they were exercising their put option with respect to their combined 21% ownership of GAA. The purchase of the ownership interests subject to the put option had not settled as of June 30, 2018. However, because of the issuance of the exercise notice, the related non-controlling interest in GAA was reclassified as a liability. The purchase of the minority ownership interests is expected to close in the third quarter of 2018.

In accordance with ASC 480-10-S99-3A, Classification and Measurement of Redeemable Securities, non-controlling interests are classified outside of permanent equity as their redemption is not (i) mandatory, (ii) at fixed prices, and (iii) exclusively within the Company’s control.

The non-controlling interest related to TT is not classified as a liability, because redemption is not mandatory or at a fixed price. It is not classified as equity because the redemption is not exclusively in the Company’s control. Therefore, the non-controlling interest is held in temporary equity in the Condensed Consolidated Balance Sheets.

The non-controlling interests’ carrying value is determined by the Company’s purchase prices and the non-controlling interests’ share of the Company’s subsequent net income. This value is benchmarked against the redemption value of the sellers’ put options. The carrying value is adjusted to the latter, provided that it does not fall below the initial carrying values, as determined by the Company’s purchase price allocation. The Company reflects any changes caused by such an adjustment in retained earnings, rather than in current earnings.

The table below reflects the non-controlling interests’ effects on the Company’s financial statements (amounts in thousands):

	Redeemable non-controlling interests
January 1, 2018	$	4,411
Adjustment to the redemption value of non-controlling interests	890
Net income attributable to non-controlling interests	371
Distributions to non-controlling interest holders	(199		)
Reclassification to liabilities	(2,911		)
June 30, 2018	$	2,562

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REVOLVING CREDIT ARRANGEMENT

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

REVOLVING CREDIT ARRANGEMENT

REVOLVING CREDIT ARRANGEMENT

On August 3, 2017, the Company entered into a Credit Agreement, dated as of August 2, 2017, for a three year U.S. $50.0 million senior secured first lien revolving credit facility that matures in August 2020. Upon request of the Company, the credit facility may be increased by up to $25.0 million, with a minimum increase of $5.0 million. The credit facility contains covenants that are customary for an issuer with senior debt. The commitment fees of $0.4 million is amortized over the life of the facility and is recorded to Other Assets. As of June 30, 2018, the Company was in compliance with the covenants for its credit facility.

As of June 30, 2018, there were no amounts outstanding under the revolving line of credit.

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CONVERTIBLE SENIOR NOTES

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

CONVERTIBLE SENIOR NOTES

CONVERTIBLE SENIOR NOTES

Convertible Senior Notes due 2022

On August 22, 2017, the Company issued $92.0 million aggregate principal amount of its 5.00% Convertible Senior Notes due 2022, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Notes bear interest at a fixed rate of 5.00% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election. The Company currently intends to settle the debt in cash. The Notes will mature on August 15, 2022, unless earlier converted, redeemed or repurchased. The Company may not redeem the Notes prior to August 15, 2020. The net proceeds from the offering were approximately $89.0 million, after deducting discounts to the initial purchasers but prior to other offering expenses payable by the Company.

Convertible Senior Notes due 2020

On April 1, 2015, as part of the City Index acquisition consideration, the Company issued to the sellers $60.0 million aggregate principal amount of 4.125% Convertible Senior Notes maturing on April 1, 2020. These Convertible Senior Notes pay interest semi-annually on April 1 and October 1 at a rate of 4.125% per year, which commenced on October 1, 2015. The Company currently intends to settle the debt in cash.

Convertible Senior Notes due 2018

On November27, 2013, the Company issued $80.0 million principal amount of 4.125% Convertible Senior Notes due December 1, 2018. The Company received net proceeds of $77.9 million, after deducting the initial purchasers' discount. These Convertible Senior Notes pay interest semi-annually on June 1 and December 1 at a rate of 4.125% per year, which commenced on June 1, 2014. During the first quarter of 2016, the Company repurchased $1.9 million in principal amount of the convertible senior notes due 2018, for an aggregate purchase price of $1.7 million. During the third quarter of 2017, the Company repurchased $71.8 million in principal amount of the convertible senior notes due 2018, for an aggregate purchase price of $73.7 million with the proceeds from the issuance of Convertible Senior Notes due 2022. As a result, the Company recognized an extinguishment loss of $4.9 million. The Company currently intends to settle the remaining outstanding debt in cash upon maturity.

Under accounting guidance, an entity must separately account for the liability and equity components of a convertible debt instrument that may be settled entirely or partially in cash upon conversion. The separate accounting must reflect the issuer’s economic interest cost.

The balances of the liability and equity components as of June 30, 2018 and December 31, 2017 were as follows (amounts in thousands):

	June 30, 2018			December 31, 2017
Liability component - principal	$	158,350		$	158,350
Deferred bond discount	(22,615		)	(25,624		)
Deferred financing cost	(446		)	(505		)
Liability component - net carrying value	$	135,289		$	132,221
Additional paid in capital	$	39,405		$	39,405
Discount attributable to equity	(826		)	(826		)
Equity component	$	38,579		$	38,579

Interest expense related to the Convertible Senior Notes, included in Interest Expense on long term borrowings in the Condensed Consolidated Statements of Operations and Comprehensive Income, was as follows (amounts in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Interest expense - stated coupon rate	$	1,834	$	1,425	$	3,668	$	2,850
Interest expense - amortization of deferred bond discount and costs	1,554		1,269		3,060		2,509
Total interest expense - convertible senior notes	$	3,388	$	2,694	$	6,728	$	5,359

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EARNINGS/(LOSS) PER COMMON SHARE

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

EARNINGS/(LOSS) PER COMMON SHARE

EARNINGS/(LOSS) PER COMMON SHARE

Basic and diluted earnings/(loss) per common share are computed by dividing net income/(loss) by the weighted average number of common shares outstanding during the period. Diluted earnings/(loss) per share includes the determinants of basic net income per share and, in addition, gives effect to the potential dilution that would occur if securities or other contracts to issue common stock were exercised, vested or converted into common stock, unless they are anti-dilutive. Diluted weighted average common shares include vested and unvested stock options, unvested restricted stock units and unvested restricted stock awards. Approximately 0.3 million and 0.4 million stock options were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2018, respectively, as they were anti-dilutive. Approximately 0.2 million and 0.3 million stock options were excluded from the calculation of diluted earnings per share for the three and six months ended June 30, 2017, respectively, as they were anti-dilutive.

Diluted earnings (loss) per share excludes any shares of Company common stock potentially issuable under the Company’s convertible senior notes, which are discussed in Note 14. Based upon an assumed trading price of $13 for each share of the Company’s common stock, and if the relevant conditions under the indenture governing the 2018, 2020, and 2022 convertible senior notes were satisfied, there would be no additional dilutive shares for the 2018 note and an additional 1.5 million and 4.2 million dilutive shares as of June 30, 2018, for the 2020 and 2022 notes, respectively.

The following table sets forth the computation of earnings/(loss) per share (amounts in thousands except share and per share data):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2018			2017		2018			2017
Net income/(loss) from continuing operations	$	6,506		$	13,370	$	18,246		$	(5,180	)
Adjustment (1)	(523		)	915		(890		)	983
Net income/(loss) available to GAIN common shareholders from continuing operations	$	5,983		$	14,285	$	17,356		$	(4,197	)
Net income from discontinued operations	60,642			569		64,988			248
Weighted average common shares outstanding:
Basic weighted average common shares outstanding	44,797,103			47,687,214		44,906,800			47,790,307
Effect of dilutive securities:
Stock options	276,899			207,434		269,316			267,880
RSUs/RSAs	235,000			—		239,658			6,923
Diluted weighted average common shares outstanding	45,309,002			47,894,648		45,415,774			47,790,307
Basic earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.39		$	(0.09	)
Basic earnings from discontinued operations	$	1.36		$	0.01	$	1.45		$	0.01
Diluted earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.38		$	(0.09	)
Diluted earnings from discontinued operations	$	1.34		$	0.01	$	1.43		$	0.01

(1) During the three and six months ended June 30, 2018 and 2017, the Company concluded that the carrying value of the Company's redeemable noncontrolling interests was less than their redemption value, requiring that an adjustment to the carrying value be recorded for purposes of calculating earnings/(loss) per common share. The adjustment to increase or reduce the carrying value will, respectively, reduce or increase earnings/(loss) per common share by reducing or increasing net income available to common shareholders.

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COMMITMENT AND CONTINGENCIES

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENT AND CONTINGENCIES

COMMITMENT AND CONTINGENCIES

From time to time the Company becomes involved in legal proceedings and in each case the Company assesses the likely liability and/or the amount of damages as appropriate. Where available information indicates that it is probable a liability had been incurred at the date of the Condensed Consolidated Financial Statements and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to income. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss.

For certain legal proceedings, the Company can estimate possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued. For certain other legal proceedings, the Company cannot reasonably estimate such losses, if any, since the Company cannot predict if, how or when such proceedings will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues must be developed, including the need to discover and determine important factual matters and the need to address novel or unsettled legal questions relevant to the proceedings in question, before a loss or additional loss or range of loss can be reasonably estimated for any proceeding.

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INCOME TAXES

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's (benefit)/provision for income taxes was approximately $(0.3) million and $7.4 million for the three and six months ended June 30, 2018 and a provision/(benefit) of approximately $1.5 million and $(4.4) million for the three and six months ended June 30, 2017. These amounts reflect the Company's estimate of the annual effective tax rates of (4.0)% and 10.2%, adjusted for certain discrete items, for the three months ended June 30, 2018 and 2017, respectively. The Company's effective tax rates of 28.3% and 47.4% for the six months ended June 30, 2018 and 2017, respectively, reflect the Company's estimate of the annual effective tax rate adjusted for certain discrete items, primarily changes in uncertain tax positions. Changes in the Company's effective tax rate arise primarily from changes in the geographic mix of revenues and expenses, as well as changes to statutory tax rates.

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Certain net deferred tax assets of the Company are included in Other assets on the Condensed Consolidated Balance Sheets.

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REGULATORY REQUIREMENTS

6 Months Ended

Jun. 30, 2018

Banking and Thrift [Abstract]

REGULATORY REQUIREMENTS

REGULATORY REQUIREMENTS

The following table illustrates the minimum regulatory capital our subsidiaries were required to maintain as of June 30, 2018 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	$	35.8	$	48.8	$	13.0	136	%
GAIN Capital Securities, Inc.	0.1		0.4		0.3		400	%
GAIN Capital U.K., Ltd.	66.4		201.2		134.8		303	%
GAIN Capital Japan Co., Ltd.	1.6		9.5		7.9		594	%
GAIN Capital Australia, Pty. Ltd.	0.7		5.4		4.7		771	%
GAIN Capital-Forex.com Hong Kong, Ltd.	1.9		3.4		1.5		179	%
GAIN Global Markets, Inc.	0.4		2.0		1.6		500	%
GAIN Capital-Forex.com Canada, Ltd.	0.2		1.4		1.2		700	%
GAIN Capital Singapore Pte., Ltd.	0.3		7.4		7.1		2,467	%

Trade Facts, Ltd.	0.6		3.5		2.9		583	%
Global Asset Advisors, LLC	—		1.4		1.4		100	%
GAIN Capital Payments Ltd.	0.1		0.4		0.3		400	%
GTX SEF, LLC	0.8		1.0		0.2		125	%
Total	$	108.9	$	285.8	$	176.9	262	%

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

ASC Topic 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise which engage in business activities from which they may earn revenues and incur expenses and about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision making group, in deciding how to allocate resources and in assessing performance. Reportable segments are defined as an operating segment that either (a) exceeds 10% of revenue, or (b) the reported profit or loss in absolute amount of which exceeds 10% of profit of all operating segments that did not report a loss or (c) exceeds 10% of the combined assets of all operating segments. The Company’s operations relate to global trading services and solutions.

During the first quarter of 2018, the Company completed its implementation of global support groups in the areas of finance, legal, human resources, and treasury. These groups are now centrally managed and support all business functions. Therefore, all costs related to these groups previously recorded within the retail segment will now be classified in our corporate and other segment to better align the cost reporting with the support services. The change in segment reporting has no impact on the net profit or loss of the Company. To enable comparisons with prior period performance, historical segment information for the periods included in the tables below reflect this reporting change.

On June 29, 2018, the Company completed the sale of its GTX ECN business, which previously comprised the Company's institutional segment, to Deutsche Börse Group via its FX unit, 360T, for a total purchase price of $100 million subject to a customary working capital adjustment. The Company determined that the institutional segment met the discontinued operations criteria set forth in ASC Subtopic 205-20-45, Presentation of Financial Statements, in the quarter ended June 30, 2018. As such, the institutional segment results have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For more information relating to the discontinued operations of the Company's GTX ECN business, please see Note 3.

Retail Segment

Business in the retail segment is conducted primarily through the Company’s FOREX.com and City Index brands. The Company provides its retail customers around the world with access to over 12,500 global financial markets, including spot forex, precious metals, and CFDs on currencies, commodities, indices, individual equities, cryptocurrencies, bonds and interest rate products, as well as OTC options on forex. In the United Kingdom, the Company also offer spread bets, which are investment products similar to CFDs, but that offer more favorable tax treatment to residents of that country.

Futures Segment

The futures segment offers execution and related services for exchange-traded futures, including futures on Bitcoin, and futures options on major U.S. and European exchanges. The Company offers futures services through its subsidiary, GAIN Capital Group, LLC, under several brands, including GAIN Capital Futures. In addition, in 2014, the Company expanded its futures business by acquiring majority interests in GAA and TT.

Corporate and other

Corporate and other provides general corporate services to the Company’s segments and also includes expense eliminations between operating segments, which were $0.4 million and $0.6 million for the three months ended June 30, 2018 and 2017, respectively, and $0.9 million and $1.1 million for the six months ended June 30, 2018 and 2017, respectively. Corporate and other revenue primarily comprises foreign currency transaction gains and losses.

Selected financial information by segment is presented in the following tables (amounts in thousands):

	Retail
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	74,532		$	80,605		$	160,205		$	120,692
Employee compensation and benefits	13,648			14,405			29,072			27,740
Selling and marketing	6,496			7,244			12,161			16,150
Referral fees	7,040			9,826			14,726			22,149
Other operating expenses	18,279			15,217			36,011			28,620
Segment profit	$	29,069		$	33,913		$	68,235		$	26,033
	Futures
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	12,100		$	10,013		$	23,591		$	20,980
Employee compensation and benefits	2,863			2,494			5,374			5,045
Selling and marketing	202			221			443			486
Referral fees	3,424			3,486			7,169			7,604
Other operating expenses	3,556			3,234			7,349			6,976
Segment profit	$	2,055		$	578		$	3,256		$	869
	Corporate and Other
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Other revenue/(loss)	$	(2,447	)	$	(27	)	$	(1,251	)	$	99
Employee compensation and benefits	5,962			6,112			12,365			10,749
Selling and marketing	69			52			133			116
Other operating expenses	3,711			2,578			6,970			5,234
Loss	$	(12,189	)	$	(8,769	)	$	(20,719	)	$	(16,000	)

Reconciliation of operating segment profit to Income before income tax expense

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Retail segment	$	29,069		$	33,913		$	68,235		$	26,033
Futures segment	2,055			578			3,256			869
Corporate and other	(12,189		)	(8,769		)	(20,719		)	(16,000		)
SEGMENT PROFIT	18,935			25,722			50,772			10,902
Depreciation and amortization	5,341			4,121			10,709			7,949
Purchased intangible amortization	3,612			3,817			7,280			6,883
Restructuring expenses	25			—			25			—
Impairment of investment	—			—			(130		)	—
OPERATING PROFIT/(LOSS)	9,957			17,784			32,888			(3,930		)
Interest expense on long term borrowings	3,388			2,694			6,728			5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE	$	6,569		$	15,090		$	26,160		$	(9,289	)

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On July 26, 2018, the Company announced the payment of a $0.06 dividend per share of Common Stock payable on September 18, 2018 to stockholders of record on September 11, 2018.

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements for the interim periods. The financial statements are presented in accordance with accounting principles generally accepted in the United States of America. The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the Securities and Exchange Commission's ("SEC") regulations for interim financial statements, and, in accordance with SEC rules, omit or condense certain information and footnote disclosures. Results for the interim periods are not necessarily indicative of results to be expected for any other interim period or for the full year. These financial statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, after the elimination of inter-company transactions and balances.

Accounting Pronouncements Recently Adopted and Not Yet Adopted

ACCOUNTING PRONOUNCEMENTS

Recently Adopted

In January 2017, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2) from the goodwill impairment test. Instead, an impairment charge will equal the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the amount of goodwill allocated to the reporting unit. The guidance will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted after January 1, 2017. The Company has adopted this ASU as of January 1, 2018, and will apply Step 2 going forward to the extent it is required.

In November 2016, the FASB issued ASU No. 2016-18, “Restricted Cash,” which requires that companies present cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents (restricted cash) when reconciling beginning-of-period and end-of-period totals on the Statement of Cash Flows. The Company has retrospectively adopted this ASU as of January 1, 2018 and includes cash and cash equivalents held for customers as restricted cash. As a result, Net cash used in operating activities on the Statement of Cash Flows increased by $20.2 million for the six months ended June 30, 2017.

The Company defines restricted cash to include cash and cash equivalents held for customers, which represents cash and other highly liquid assets held to fund customer liabilities in connection with trading positions. Included in this balance are funds deposited by customers and funds accruing to customers as a result of trades or contracts. The Company records a corresponding liability in connection with this amount in Payables to customers. In addition, the Company holds certain customer funds in segregated or secured broker accounts. Legally segregated balances are not available for general use, in accordance with certain jurisdictional regulatory requirements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of revenue falls under ASC Topic 825, Financial Instruments, which is excluded from the scope of the new guidance. The Company adopted ASU No. 2014-09 using the modified retrospective approach. See Note 4 Revenue Recognition for additional disclosure.

Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which amended the guidance on accounting for leases. The FASB issued this update to increase transparency and comparability among organizations. This update requires recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220),” to address certain income tax effects in Accumulated Other Comprehensive Income (AOCI) resulting from the tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within AOCI to retained earnings in the period in which the effect of the tax reform is recorded. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods. Early adoption is permitted. The Company is currently assessing the impact on its Financial Statements of adopting this guidance.

Revenue Recognition

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which is part of ASC Topic 606. It defines how companies report revenues from contracts with customers and also requires certain enhanced disclosures. The standard’s provisions and related amendments are effective for annual reporting periods beginning after December 15, 2017. On January 1, 2018, the Company adopted this guidance, which did not have a material impact on the Company’s financial statements. A substantial portion of the Company's retail revenue as well as interest revenue falls under ASC Topic 825, “Financial Instruments”, which is excluded from the scope of Topic 606. Additionally, the Company’s futures segment revenue was not materially impacted as the satisfaction of performance obligations under the new guidance is materially consistent with the Company’s previous revenue recognition policies. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis.

Similarly, the amended guidance did not have a material impact on the recognition of costs incurred to obtain new contracts. As a result of the adoption of the new guidance, the Company recorded a gross up of $0.5 million and $1.0 million for the three and six months ended June 30, 2018, respectively, which impacted referral fee expense in the Company's discontinued operations. The Company adopted ASU No. 2014-09 using the modified retrospective approach.

Under ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to customers in exchange for an amount that reflects the consideration the Company expects to be entitled to in transferring those goods or services. The following is a description of the Company’s revenue recognition policies as they relate to revenue from contracts with customers.

Futures Revenue

Futures revenue comprises primarily commissions earned on futures and futures options trades. We act as an agent for the trades executed in our futures segment and are not exposed to market risk in connection with that activity. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s futures revenue performance obligations also consist of trade execution and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date.

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DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
REVENUE:
Institutional revenue	$	7,923		$	7,435		$	16,379		$	15,802
Other revenue	(2		)	—			(2		)	—
Total non-interest revenue	7,921			7,435			16,377			15,802
Interest revenue	55			28			103			48
Total net interest revenue	55			28			103			48
Net revenue	$	7,976		$	7,463		$	16,480		$	15,850
EXPENSES:
Employee compensation and benefits	$	2,466		$	3,314		$	5,879		$	7,006
Trading expenses	2,782			2,315			5,439			4,911
Other expenses	1,861			1,804			3,924			3,183
Total operating expense	7,109			7,433			15,242			15,100
OPERATING PROFIT	867			30			1,238			750
Gain on sale of discontinued operations	69,581			—			69,581			—
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)	70,448			30			70,819			750
Income tax expense/(benefit)	9,806			(539		)	5,831			502
NET INCOME FROM DISCONTINUED OPERATIONS	$	60,642		$	569		$	64,988		$	248

Since the sale of the GTX ECN business closed on June 29, 2018, there are no assets held for sale as of June 30, 2018. As of December 31, 2017, total assets of $28.5 million and total liabilities of $3.8 million were related to the discontinued segment.

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

	Three months ended June 30, 2018		Six months ended June 30, 2018
Futures
Direct Customers (1)	$	2,693	$	5,166
Indirect Customers (2)	$	6,555	$	13,583
Other	$	2,852	$	4,842
Total Segment Revenue	$	12,100	$	23,591

(1) Direct customers are all customers not classified as indirect

(2) Indirect customers are referred to the Company by introducing brokers

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FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis during the reporting period and the related hierarchy levels (amounts in thousands):

	Fair Value Measurements on a Recurring Basis as of June 30, 2018
	Level 1		Level 2			Level 3		Total
Financial Assets/(Liabilities):
Cash and cash equivalents:
Money market accounts	$	252,311	$	—		$	—	$	252,311
Cash and cash equivalents held for customers:
US treasury bills: U.S. government and agency securities	103,891		—			—		103,891
Receivable from brokers:
Broker derivative contracts	—		(10,391		)	—		(10,391		)
Other assets:
Certificates of deposit	176		—			—		176
Other	125		—			—		125
Payables to customers:
Customer derivative contracts	—		124,807			—		124,807
Payables to brokers:
Broker derivative contracts	—		2,482			—		2,482
Total	$	356,503	$	116,898		$	—	$	473,401

	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 cash equivalents 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

Carrying Value and Fair Value and Fair Value Hierarchy Category of Financial Instruments Not Measured at Fair Value in Condensed Consolidated Statements of Financial Condition

The carrying value of Convertible senior notes represents the notes’ principal amounts net of unamortized discount (refer to Note 14). The Company assessed the notes’ fair value as determined by current Company-specific and risk free interest rates as of the balance sheet date.

	As of June 30, 2018				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	$	62,726	$	62,726	$	—	$	62,726	$	—
Financial Liabilities:
Payables to customers	$	1,045,173	$	1,045,173	$	—	$	1,045,173	$	—
Payable to brokers	$	5,455	$	5,455	$	—	$	5,455	$	—
Convertible senior notes	$	135,289	$	179,847	$	—	$	179,847	$	—

	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	$	—

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DERIVATIVES (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Values of Derivative Instruments

The table below represents the fair values of the Company’s derivative instruments reported within Receivables from brokers, Payables to customers and Payables to brokers on the accompanying Condensed Consolidated Balance Sheets (amounts in thousands):

	June 30, 2018
	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	$	105,405		$	(23,079	)	$	82,326
CFD contracts	91,411			(60,328		)	31,083
Metals contracts	6,363			(2,874		)	3,489
Total	$	203,179		$	(86,281	)	$	116,898
	June 30, 2018
	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	$	62,726		$	(10,391	)	$	52,335
Payables to customers	$	(1,045,173	)	$	124,807		$	(920,366	)
Payable to brokers	$	(5,455	)	$	2,482		$	(2,973	)

	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	)

Notional Values of Derivative Instruments

The amounts reported within Receivables from brokers, Payables to customers, and Payables to brokers on the Consolidated Balance Sheets are derived from the number of contracts below (amounts in thousands):

	June 30, 2018
	Total contracts in long positions	Total contracts in short positions
Derivative Instruments:
Foreign currency exchange contracts	3,019,520	3,598,235
CFD contracts	115,947	168,033
Metals contracts	485	120
Total	3,135,952	3,766,388

	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

Net Gains (Losses) With Respect to Derivative Instruments Which are Reflected in Trading Revenue

Net gains with respect to derivative instruments reflected in Retail revenue in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months endedJune 30, 2018 and June 30, 2017 were as follows (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Derivative Instruments:
Foreign currency exchange contracts	$	51,579	$	43,633	$	92,830	$	61,009
CFD contracts	14,681		26,422		51,828		53,213
Metals contracts	5,759		9,018		11,481		3,782
Total	$	72,019	$	79,073	$	156,139	$	118,004

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RECEIVABLES FROM BROKERS (Tables)

6 Months Ended

Jun. 30, 2018

Brokers and Dealers [Abstract]

Schedule of Receivable from Brokers

Amounts receivable from brokers consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Required collateral	$	62,726		$	73,537
Open foreign exchange positions	(10,391		)	4,966
Total	$	52,335		$	78,503

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, including leasehold improvements and capitalized software development costs, consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Software	$	59,713		$	57,047
Computer equipment	18,964			18,390
Leasehold improvements	10,963			11,068
Telephone equipment	642			643
Office equipment	2,048			2,110
Furniture and fixtures	3,544			3,592
Web site development costs	635			386
Gross property and equipment	96,509			93,236
Less: Accumulated depreciation and amortization	(60,047		)	(52,494		)
Property and equipment, net	$	36,462		$	40,742

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INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The Company’s various intangible assets consisted of the following as of (amounts in thousands):

	June 30, 2018							December 31, 2017
Intangibles	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Customer lists	$	59,658	$	(36,210	)	$	23,448	$	60,420	$	(31,698	)	$	28,722
Technology	50,233		(37,273		)	12,960		72,204		(43,270		)	28,934
Trademarks	7,533		(4,187		)	3,346		7,680		(3,730		)	3,950
Total finite lived intangibles	117,424		(77,670		)	39,754		140,304		(78,698		)	61,606
Trademark not subject to amortization (1)	363		—			363		363		—			363
Total intangibles	$	117,787	$	(77,670	)	$	40,117	$	140,667	$	(78,698	)	$	61,969

(1) These indefinite-life trademarks relate to the Forex.com and foreignexchange.com domain names where management determined there was no legal, regulatory or technological limitation on their useful lives. The Company compares the recorded value of the indefinite-life intangible assets to their fair value on an annual basis and whenever circumstances arise that indicate that impairment may have occurred.

The Company had the following identifiable intangible assets and weighted average amortization periods as of June 30, 2018:

Intangible Assets	Amount (in thousands)		Weighted average amortization period
Customer lists	$	59,658	6.9 years
Technology	50,233		8.6 years
Trademarks (1)	7,896		6.7 years
Total intangible assets	$	117,787

(1) Trademarks with an indefinite-life, as described above, comprise $0.4 million of the $7.9 million of trademarks.

Schedule of Goodwill

The following represents the changes in the carrying amount of goodwill by segment (amounts in thousands):

	Retail			Institutional			Futures			Total
Carrying amount of goodwill as of December 31, 2017	$	25,952		$	4,650		$	2,434		$	33,036
Foreign currency translation adjustments	(186		)	(34		)	(18		)	(238		)
Discontinued operations	—			(4,616		)	—			(4,616		)
Carrying amount of goodwill as of June 30, 2018	$	25,766		$	—		$	2,416		$	28,182

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OTHER ASSETS (Tables)

6 Months Ended

Jun. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consisted of the following as of (amounts in thousands):

	June 30, 2018			December 31, 2017
Vendor and security deposits	$	6,932		$	11,923
Income tax receivable	282			2,132
Deferred tax assets, net	12,053			10,698
GTX trade receivables	616			5,758
Customer debit positions	4,067			2,384
Allowance on customer debit positions	(3,700		)	(1,959		)
Prepaid assets	8,801			9,523
Miscellaneous receivables	7,248			4,872
Deferred commitment fees	444			550
Total other assets	$	36,743		$	45,881

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NON-CONTROLLING INTERESTS (Tables)

6 Months Ended

Jun. 30, 2018

Noncontrolling Interest [Abstract]

Summary of redeemable noncontrolling interest treatment

The table below reflects the non-controlling interests’ effects on the Company’s financial statements (amounts in thousands):

	Redeemable non-controlling interests
January 1, 2018	$	4,411
Adjustment to the redemption value of non-controlling interests	890
Net income attributable to non-controlling interests	371
Distributions to non-controlling interest holders	(199		)
Reclassification to liabilities	(2,911		)
June 30, 2018	$	2,562

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CONVERTIBLE SENIOR NOTES (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Liability and Equity Components of Convertible Debt

The balances of the liability and equity components as of June 30, 2018 and December 31, 2017 were as follows (amounts in thousands):

	June 30, 2018			December 31, 2017
Liability component - principal	$	158,350		$	158,350
Deferred bond discount	(22,615		)	(25,624		)
Deferred financing cost	(446		)	(505		)
Liability component - net carrying value	$	135,289		$	132,221
Additional paid in capital	$	39,405		$	39,405
Discount attributable to equity	(826		)	(826		)
Equity component	$	38,579		$	38,579

Schedule of Interest Expense

Interest expense related to the Convertible Senior Notes, included in Interest Expense on long term borrowings in the Condensed Consolidated Statements of Operations and Comprehensive Income, was as follows (amounts in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Interest expense - stated coupon rate	$	1,834	$	1,425	$	3,668	$	2,850
Interest expense - amortization of deferred bond discount and costs	1,554		1,269		3,060		2,509
Total interest expense - convertible senior notes	$	3,388	$	2,694	$	6,728	$	5,359

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EARNINGS/(LOSS) PER COMMON SHARE (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Computation of Earnings Per Share

The following table sets forth the computation of earnings/(loss) per share (amounts in thousands except share and per share data):

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2018			2017		2018			2017
Net income/(loss) from continuing operations	$	6,506		$	13,370	$	18,246		$	(5,180	)
Adjustment (1)	(523		)	915		(890		)	983
Net income/(loss) available to GAIN common shareholders from continuing operations	$	5,983		$	14,285	$	17,356		$	(4,197	)
Net income from discontinued operations	60,642			569		64,988			248
Weighted average common shares outstanding:
Basic weighted average common shares outstanding	44,797,103			47,687,214		44,906,800			47,790,307
Effect of dilutive securities:
Stock options	276,899			207,434		269,316			267,880
RSUs/RSAs	235,000			—		239,658			6,923
Diluted weighted average common shares outstanding	45,309,002			47,894,648		45,415,774			47,790,307
Basic earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.39		$	(0.09	)
Basic earnings from discontinued operations	$	1.36		$	0.01	$	1.45		$	0.01
Diluted earnings/(loss) from continuing operations	$	0.13		$	0.30	$	0.38		$	(0.09	)
Diluted earnings from discontinued operations	$	1.34		$	0.01	$	1.43		$	0.01

(1) During the three and six months ended June 30, 2018 and 2017, the Company concluded that the carrying value of the Company's redeemable noncontrolling interests was less than their redemption value, requiring that an adjustment to the carrying value be recorded for purposes of calculating earnings/(loss) per common share. The adjustment to increase or reduce the carrying value will, respectively, reduce or increase earnings/(loss) per common share by reducing or increasing net income available to common shareholders.

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REGULATORY REQUIREMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Banking and Thrift [Abstract]

Regulatory Capital Subsidiaries Required to Maintain

The following table illustrates the minimum regulatory capital our subsidiaries were required to maintain as of June 30, 2018 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	$	35.8	$	48.8	$	13.0	136	%
GAIN Capital Securities, Inc.	0.1		0.4		0.3		400	%
GAIN Capital U.K., Ltd.	66.4		201.2		134.8		303	%
GAIN Capital Japan Co., Ltd.	1.6		9.5		7.9		594	%
GAIN Capital Australia, Pty. Ltd.	0.7		5.4		4.7		771	%
GAIN Capital-Forex.com Hong Kong, Ltd.	1.9		3.4		1.5		179	%
GAIN Global Markets, Inc.	0.4		2.0		1.6		500	%
GAIN Capital-Forex.com Canada, Ltd.	0.2		1.4		1.2		700	%
GAIN Capital Singapore Pte., Ltd.	0.3		7.4		7.1		2,467	%

Trade Facts, Ltd.	0.6		3.5		2.9		583	%
Global Asset Advisors, LLC	—		1.4		1.4		100	%
GAIN Capital Payments Ltd.	0.1		0.4		0.3		400	%
GTX SEF, LLC	0.8		1.0		0.2		125	%
Total	$	108.9	$	285.8	$	176.9	262	%

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Selected Financial Information by Segment

Selected financial information by segment is presented in the following tables (amounts in thousands):

	Retail
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	74,532		$	80,605		$	160,205		$	120,692
Employee compensation and benefits	13,648			14,405			29,072			27,740
Selling and marketing	6,496			7,244			12,161			16,150
Referral fees	7,040			9,826			14,726			22,149
Other operating expenses	18,279			15,217			36,011			28,620
Segment profit	$	29,069		$	33,913		$	68,235		$	26,033
	Futures
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net revenue	$	12,100		$	10,013		$	23,591		$	20,980
Employee compensation and benefits	2,863			2,494			5,374			5,045
Selling and marketing	202			221			443			486
Referral fees	3,424			3,486			7,169			7,604
Other operating expenses	3,556			3,234			7,349			6,976
Segment profit	$	2,055		$	578		$	3,256		$	869
	Corporate and Other
	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Other revenue/(loss)	$	(2,447	)	$	(27	)	$	(1,251	)	$	99
Employee compensation and benefits	5,962			6,112			12,365			10,749
Selling and marketing	69			52			133			116
Other operating expenses	3,711			2,578			6,970			5,234
Loss	$	(12,189	)	$	(8,769	)	$	(20,719	)	$	(16,000	)

Reconciliation of Operating Segment Profit to Income Before Income Tax Expense

Reconciliation of operating segment profit to Income before income tax expense

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Retail segment	$	29,069		$	33,913		$	68,235		$	26,033
Futures segment	2,055			578			3,256			869
Corporate and other	(12,189		)	(8,769		)	(20,719		)	(16,000		)
SEGMENT PROFIT	18,935			25,722			50,772			10,902
Depreciation and amortization	5,341			4,121			10,709			7,949
Purchased intangible amortization	3,612			3,817			7,280			6,883
Restructuring expenses	25			—			25			—
Impairment of investment	—			—			(130		)	—
OPERATING PROFIT/(LOSS)	9,957			17,784			32,888			(3,930		)
Interest expense on long term borrowings	3,388			2,694			6,728			5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE	$	6,569		$	15,090		$	26,160		$	(9,289	)

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 segment	Jun. 29, 2018 USD ($)
Accounting Policies [Abstract]
Number of operating segments | segment	2
Discontinued Operations, Disposed of by Sale | GTX ECN
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, including discontinued operation, consideration | $		$ 100

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ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities of continuing operations	$ 8,233	$ (24,521)
Accounting Standards Update 2016-18
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities of continuing operations		$ (20,200)

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DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 29, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
NET INCOME FROM DISCONTINUED OPERATIONS	$ 60,642	$ 569	$ 64,988	$ 248
GTX ECN | Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, including discontinued operation, consideration					$ 100,000
Gain on sale of discontinued operations	69,581	0	69,581	0
Total non-interest revenue	7,921	7,435	16,377	15,802
Interest revenue	55	28	103	48
Total net interest revenue	55	28	103	48
Net revenue	7,976	7,463	16,480	15,850
Employee compensation and benefits	2,466	3,314	5,879	7,006
Trading expenses	2,782	2,315	5,439	4,911
Other expenses	1,861	1,804	3,924	3,183
Total operating expense	7,109	7,433	15,242	15,100
OPERATING PROFIT	867	30	1,238	750
Gain on sale of discontinued operations	69,581	0	69,581	0
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)	70,448	30	70,819	750
Income tax expense/(benefit)	9,806	(539)	5,831	502
NET INCOME FROM DISCONTINUED OPERATIONS	60,642	569	64,988	248
Total assets of discontinued operations					28,500
Total liabilities of discontinued operations					$ 3,800
GTX ECN | Discontinued Operations, Disposed of by Sale | Institutional revenue
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total non-interest revenue	7,923	7,435	16,379	15,802
GTX ECN | Discontinued Operations, Disposed of by Sale | Other (loss)/revenue
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total non-interest revenue	$ (2)	$ 0	$ (2)	$ 0

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REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue from contract with customer	$ 0.5	$ 1.0

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REVENUE RECOGNITION - Disaggregation of Revenue (Details) - Futures - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 12,100	$ 23,591
Direct Customers
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	2,693	5,166
Indirect Customers
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	6,555	13,583
Other
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 2,852	$ 4,842

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FAIR VALUE MEASUREMENT - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 473,401	$ 456,543
Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	252,311	219,286
US treasury bills: U.S. government and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	103,891	105,190
Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	(10,391)	4,966
Liabilities		3,170
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	176	175
Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	125	130
Customer derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	124,807	129,966
Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	2,482
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	356,503	324,781
Level 1 | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	252,311	219,286
Level 1 | US treasury bills: U.S. government and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	103,891	105,190
Level 1 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 1 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	176	175
Level 1 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	125	130
Level 1 | Customer derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	0
Level 1 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	116,898	131,762
Level 2 | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2 | US treasury bills: U.S. government and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	(10,391)	4,966
Liabilities		3,170
Level 2 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 2 | Customer derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	124,807	129,966
Level 2 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	2,482
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 | Money market accounts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3 | US treasury bills: U.S. government and agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3 | Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level 3 | Customer derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	0	$ 0
Level 3 | Broker derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	$ 0

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FAIR VALUE MEASUREMENT - Carrying Value and Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financial Assets:
Receivables from brokers	$ 52,335	$ 78,503
Financial Liabilities:
Payables to brokers	2,973	2,789
Convertible senior notes	135,289	132,221
Derivative Assets | Level 1
Financial Assets:
Receivables from brokers	0	0
Financial Liabilities:
Payables to brokers		0
Derivative Assets | Level 2
Financial Assets:
Receivables from brokers	62,726	73,537
Financial Liabilities:
Payables to brokers		381
Derivative Assets | Level 3
Financial Assets:
Receivables from brokers	0	0
Financial Liabilities:
Payables to brokers		0
Derivative Assets | Carrying Value
Financial Assets:
Receivables from brokers	62,726	73,537
Financial Liabilities:
Payables to brokers		381
Derivative Assets | Fair Value
Financial Assets:
Receivables from brokers	62,726	73,537
Financial Liabilities:
Payables to brokers		381
Derivative Liabilities | Level 1
Financial Liabilities:
Payables to customers	0	0
Payables to brokers	0
Convertible senior notes	0	0
Derivative Liabilities | Level 2
Financial Liabilities:
Payables to customers	1,045,173	1,108,794
Payables to brokers	5,455
Convertible senior notes	179,847	205,073
Derivative Liabilities | Level 3
Financial Liabilities:
Payables to customers	0	0
Payables to brokers	0
Convertible senior notes	0	0
Derivative Liabilities | Carrying Value
Financial Liabilities:
Payables to customers	1,045,173	1,108,794
Payables to brokers	5,455
Convertible senior notes	135,289	132,221
Derivative Liabilities | Fair Value
Financial Liabilities:
Payables to customers	1,045,173	1,108,794
Payables to brokers	5,455
Convertible senior notes	$ 179,847	$ 205,073

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DERIVATIVES - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Gross amounts of assets for derivative open positions at fair value	$ 203,179	$ 227,847
Gross amount of (liabilities) for derivative open positions at fair value	(86,281)	(96,085)
Net amounts of assets/(liabilities) for derivative open positions at fair value	116,898	131,762
Receivables from brokers	52,335	78,503
Payables to customers	(920,366)	(978,828)
Payables to brokers	(2,973)	(2,789)
Receivables from brokers
Derivatives, Fair Value [Line Items]
Receivables from brokers	52,335	78,503
Receivables from brokers | Derivative Assets
Derivatives, Fair Value [Line Items]
Cash Collateral	62,726	73,537
Net amounts of assets/(liabilities) for derivative open positions at fair value	(10,391)	4,966
Payables to customers
Derivatives, Fair Value [Line Items]
Payables to customers	(920,366)	(978,828)
Payables to customers | Derivative Liabilities
Derivatives, Fair Value [Line Items]
Cash Collateral	1,045,173	1,108,794
Net amounts of assets/(liabilities) for derivative open positions at fair value	124,807	129,966
Foreign currency exchange contracts
Derivatives, Fair Value [Line Items]
Gross amounts of assets for derivative open positions at fair value	105,405	121,104
Gross amount of (liabilities) for derivative open positions at fair value	(23,079)	(31,556)
Net amounts of assets/(liabilities) for derivative open positions at fair value	82,326	89,548
CFD contracts
Derivatives, Fair Value [Line Items]
Gross amounts of assets for derivative open positions at fair value	91,411	102,659
Gross amount of (liabilities) for derivative open positions at fair value	(60,328)	(62,322)
Net amounts of assets/(liabilities) for derivative open positions at fair value	31,083	40,337
Metals contracts
Derivatives, Fair Value [Line Items]
Gross amounts of assets for derivative open positions at fair value	6,363	4,084
Gross amount of (liabilities) for derivative open positions at fair value	(2,874)	(2,207)
Net amounts of assets/(liabilities) for derivative open positions at fair value	3,489	1,877
Broker derivative contracts
Derivatives, Fair Value [Line Items]
Payables to brokers	(2,973)	(2,789)
Broker derivative contracts | Derivative Liabilities
Derivatives, Fair Value [Line Items]
Cash Collateral	(5,455)	381
Net amounts of assets/(liabilities) for derivative open positions at fair value	$ 2,482	$ (3,170)

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DERIVATIVES - Notional Values of Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Total contracts in long positions
Derivative [Line Items]
Notional amounts of derivative	$ 3,135,952	$ 2,202,722
Total contracts in long positions | Foreign currency exchange contracts
Derivative [Line Items]
Notional amounts of derivative	3,019,520	2,075,789
Total contracts in long positions | CFD contracts
Derivative [Line Items]
Notional amounts of derivative	115,947	126,519
Total contracts in long positions | Metal contracts
Derivative [Line Items]
Notional amounts of derivative	485	414
Total contracts in short positions
Derivative [Line Items]
Notional amounts of derivative	3,766,388	4,323,108
Total contracts in short positions | Foreign currency exchange contracts
Derivative [Line Items]
Notional amounts of derivative	3,598,235	4,148,056
Total contracts in short positions | CFD contracts
Derivative [Line Items]
Notional amounts of derivative	168,033	174,835
Total contracts in short positions | Metal contracts
Derivative [Line Items]
Notional amounts of derivative	$ 120	$ 217

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DERIVATIVES - Net Gains (Losses) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative [Line Items]
Net gains (losses) on derivative instruments, total	$ 72,019	$ 79,073	$ 156,139	$ 118,004
Foreign currency exchange contracts
Derivative [Line Items]
Net gains (losses) on derivative instruments	51,579	43,633	92,830	61,009
CFD contracts
Derivative [Line Items]
Net gains (losses) on derivative instruments	14,681	26,422	51,828	53,213
Metal contracts
Derivative [Line Items]
Net gains (losses) on derivative instruments	$ 5,759	$ 9,018	$ 11,481	$ 3,782

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RECEIVABLES FROM BROKERS - Schedule of Receivables from Brokers (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Receivables from Brokerage Clients [Line Items]
Receivables from brokers	$ 52,335	$ 78,503
Required collateral
Receivables from Brokerage Clients [Line Items]
Receivables from brokers	62,726	73,537
Open foreign exchange positions
Receivables from Brokerage Clients [Line Items]
Receivables from brokers	$ (10,391)	$ 4,966

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PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 96,509	$ 93,236
Less: Accumulated depreciation and amortization	(60,047)	(52,494)
Property and equipment, net	36,462	40,742
Software
Property, Plant and Equipment [Line Items]
Gross property and equipment	59,713	57,047
Computer equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	18,964	18,390
Leasehold improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	10,963	11,068
Telephone equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	642	643
Office equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	2,048	2,110
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,544	3,592
Website development costs
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 635	$ 386

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PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 5,341	$ 4,121	$ 10,709	$ 7,949

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INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, gross	$ 117,424		$ 117,424		$ 140,304
Accumulated Amortization	(77,670)		(77,670)		(78,698)
Finite-lived intangible assets, net	39,754		39,754		61,606
Total intangibles, gross	117,787		117,787		140,667
Intangible assets, net	40,117		40,117		61,969
Amortization of Intangible Assets	3,612	$ 3,817	7,280	$ 6,883
Payments to acquire intangible assets			0	$ 6,960
Forex Capital Markets L.L.C.
Intangible Assets by Major Class [Line Items]
Payments to acquire intangible assets					7,200
Trademarks
Intangible Assets by Major Class [Line Items]
Indefinite-lived intangible assets	363		363		363
Customer lists
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, gross	59,658		59,658		60,420
Accumulated Amortization	(36,210)		(36,210)		(31,698)
Finite-lived intangible assets, net	23,448		23,448		$ 28,722
Total intangibles, gross	59,658		$ 59,658
Weighted average amortization period			6 years 11 months
Customer lists | Forex Capital Markets L.L.C.
Intangible Assets by Major Class [Line Items]
Weighted average amortization period					2 years
Technology
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, gross	50,233		$ 50,233		$ 72,204
Accumulated Amortization	(37,273)		(37,273)		(43,270)
Finite-lived intangible assets, net	12,960		12,960		28,934
Total intangibles, gross	50,233		$ 50,233
Weighted average amortization period			8 years 7 months
Trademarks
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, gross	7,533		$ 7,533		7,680
Accumulated Amortization	(4,187)		(4,187)		(3,730)
Finite-lived intangible assets, net	3,346		3,346		$ 3,950
Total intangibles, gross	$ 7,896		$ 7,896
Weighted average amortization period			6 years 8 months

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INTANGIBLE ASSETS - Goodwill (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) reporting_unit
Goodwill [Line Items]
Number of reporting units | reporting_unit	2
Goodwill additions or impairments	$ 0
Goodwill	33,036,000
Decrease in goodwill	(4,800,000)
Goodwill [Roll Forward]
Goodwill. beginning balance	33,036,000
Foreign currency translation adjustments	(238,000)
Discontinued operations	(4,616,000)
Goodwill. ending balance	28,182,000
Operating Segments | Retail
Goodwill [Line Items]
Goodwill	25,952,000
Goodwill [Roll Forward]
Goodwill. beginning balance	25,952,000
Foreign currency translation adjustments	(186,000)
Discontinued operations	0
Goodwill. ending balance	25,766,000
Operating Segments | Institutional
Goodwill [Line Items]
Goodwill	4,650,000
Goodwill [Roll Forward]
Goodwill. beginning balance	4,650,000
Foreign currency translation adjustments	(34,000)
Discontinued operations	(4,616,000)
Goodwill. ending balance	0
Operating Segments | Futures
Goodwill [Line Items]
Goodwill	2,434,000
Goodwill [Roll Forward]
Goodwill. beginning balance	2,434,000
Foreign currency translation adjustments	(18,000)
Discontinued operations	0
Goodwill. ending balance	$ 2,416,000

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OTHER ASSETS - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Vendor and security deposits	$ 6,932	$ 11,923
Income tax receivable	282	2,132
Deferred tax assets, net	12,053	10,698
GTX trade receivables	616	5,758
Customer debit positions	4,067	2,384
Allowance on customer debit positions	(3,700)	(1,959)
Prepaid assets	8,801	9,523
Miscellaneous receivables	7,248	4,872
Deferred commitment fees	444	550
Total other assets	$ 36,743	$ 45,881

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RELATED PARTY TRANSACTIONS - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Payables to customers	$ 920,366	$ 978,828
Management
Related Party Transaction [Line Items]
Payables to customers	200	200
IPGL Limited
Related Party Transaction [Line Items]
Payables to customers	$ 20,200	$ 15,900

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NON-CONTROLLING INTERESTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Feb. 28, 2018	Dec. 31, 2016	Mar. 31, 2014
Increase (Decrease) in Temporary Equity [Roll Forward]
Redeemable noncontrolling interest, beginning balance			$ 4,411
Adjustment to the redemption value of non-controlling interests	$ 523	$ (915)	890	$ (983)
Net income attributable to non-controlling interests			371
Distributions to non-controlling interest holders			(199)
Reclassification to liabilities			(2,911)
Redeemable noncontrolling interest, ending balance	$ 2,562		$ 2,562
Global Asset Advisors, LLC
Redeemable Noncontrolling Interest [Line Items]
Percentage of company acquired (as percent)						24.00%	55.00%
Redeemable noncontrolling interest retained by noncontrolling owners (as percent)							45.00%
Noncontrolling interest by seller (as percent)					21.00%	21.00%
Top Third Ag Marketing, LLC
Redeemable Noncontrolling Interest [Line Items]
Percentage of company acquired (as percent)						24.00%	55.00%
Redeemable noncontrolling interest retained by noncontrolling owners (as percent)							45.00%
Noncontrolling interest by seller (as percent)						21.00%	45.00%

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REVOLVING CREDIT ARRANGEMENT (Details) - Revolving Credit Facility - USD ($)	Aug. 03, 2017	Jun. 30, 2018
Debt Instrument [Line Items]
Maximum amount under facility	$ 50,000,000
Commitment fee amount	400,000
Line of credit outstanding		$ 0
Maximum
Debt Instrument [Line Items]
Increase in borrowing capacity available	25,000,000
Minimum
Debt Instrument [Line Items]
Increase in borrowing capacity available	$ 5,000,000
Line of Credit
Debt Instrument [Line Items]
Term of credit facility	3 years

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CONVERTIBLE SENIOR NOTES - Additional Information (Details) - Convertible Debt - USD ($)			3 Months Ended
	Aug. 22, 2017	Nov. 27, 2013	Sep. 30, 2017	Mar. 31, 2016	Apr. 01, 2015
Convertible Notes Due 2022
Debt Instrument [Line Items]
Principal amount	$ 92,000,000.0
Stated interest rate (as percent)	5.00%
Proceeds from note offering	$ 89,000,000
Convertible Notes Due 2020
Debt Instrument [Line Items]
Principal amount					$ 60,000,000.0
Stated interest rate (as percent)					4.125%
Convertible Notes Due 2018
Debt Instrument [Line Items]
Principal amount		$ 80,000,000.0	$ 71,800,000.0	$ 1,900,000.0
Stated interest rate (as percent)		4.125%
Proceeds from note offering		$ 77,900,000
Repurchase of convertible notes			73,700,000	$ 1,700,000
Loss on extinguishment of debt			$ 4,900,000

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CONVERTIBLE SENIOR NOTES - Schedule of Liability and Equity Components (Details) - Convertible Debt - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Liability component - principal	$ 158,350	$ 158,350
Deferred bond discount	(22,615)	(25,624)
Deferred financing cost	(446)	(505)
Liability component - net carrying value	135,289	132,221
Additional paid in capital	39,405	39,405
Discount attributable to equity	(826)	(826)
Equity component	$ 38,579	$ 38,579

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CONVERTIBLE SENIOR NOTES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Debt Instrument [Line Items]
Interest expense - amortization of deferred bond discount and costs			$ 324	$ 221
Convertible Debt
Debt Instrument [Line Items]
Interest expense - stated coupon rate	$ 1,834	$ 1,425	3,668	2,850
Interest expense - amortization of deferred bond discount and costs	1,554	1,269	3,060	2,509
Total interest expense - convertible senior notes	$ 3,388	$ 2,694	$ 6,728	$ 5,359

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EARNINGS/(LOSS) PER COMMON SHARE - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive stock options excluded from calculation of diluted earnings per share	0.3	0.2	0.4	0.3
Common stock threshold for additional dilutive shares (in dollars per share)			$ 13
Convertible Notes Due 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities, effect on basic earnings per share, dilutive convertible securities			$ 0.0
Convertible Notes Due 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities, effect on basic earnings per share, dilutive convertible securities			1.5
Convertible Notes Due 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities, effect on basic earnings per share, dilutive convertible securities			$ 4.2

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EARNINGS/(LOSS) PER COMMON SHARE - Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net income/(loss) from continuing operations	$ 6,506	$ 13,370	$ 18,246	$ (5,180)
Adjustment to fair value of redeemable non-controlling interests	(523)	915	(890)	983
Net income/(loss) available to GAIN common shareholders from continuing operations	5,983	14,285	17,356	(4,197)
Net income from discontinued operations	$ 60,642	$ 569	$ 64,988	$ 248
Weighted average common shares outstanding:
Basic weighted average common shares outstanding	44,797,103	47,687,214	44,906,800	47,790,307
Effect of dilutive securities:
Stock options (in shares)	276,899	207,434	269,316	267,880
RSUs/RSAs (in shares)	235,000	0	239,658	6,923
Diluted weighted average common shares outstanding	45,309,002	47,894,648	45,415,774	47,790,307
Earnings/(loss) per common share:
Basic earnings/(loss) from continuing operations (usd per share)	$ 0.13	$ 0.30	$ 0.39	$ (0.09)
Basic earnings from discontinued operations (usd per share)	1.36	0.01	1.45	0.01
Diluted earnings/(loss) from continuing operations (usd per share)	0.13	0.30	0.38	(0.09)
Diluted earnings from discontinued operations (usd per share)	$ 1.34	$ 0.01	$ 1.43	$ 0.01

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INCOME TAXES - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Provision (benefit) for income taxes	$ (263)	$ 1,533	$ 7,413	$ (4,401)
Effective income tax rates (as percent)	(4.00%)	10.20%	28.30%	47.40%

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REGULATORY REQUIREMENTS - Regulatory Capital Subsidiaries Required to Maintain (Detail) $ in Millions	Jun. 30, 2018 USD ($)
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 108.9
Capital Levels Maintained	285.8
Excess Net Capital	$ 176.9
Percent of Requirement Maintained	262.00%
GAIN Capital Group, LLC
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 35.8
Capital Levels Maintained	48.8
Excess Net Capital	$ 13.0
Percent of Requirement Maintained	136.00%
GAIN Capital Securities, Inc.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.1
Capital Levels Maintained	0.4
Excess Net Capital	$ 0.3
Percent of Requirement Maintained	400.00%
GAIN Capital U.K., Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 66.4
Capital Levels Maintained	201.2
Excess Net Capital	$ 134.8
Percent of Requirement Maintained	303.00%
GAIN Capital Japan Co., Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 1.6
Capital Levels Maintained	9.5
Excess Net Capital	$ 7.9
Percent of Requirement Maintained	594.00%
GAIN Capital Australia, Pty. Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.7
Capital Levels Maintained	5.4
Excess Net Capital	$ 4.7
Percent of Requirement Maintained	771.00%
GAIN Capital-Forex.com Hong Kong, Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 1.9
Capital Levels Maintained	3.4
Excess Net Capital	$ 1.5
Percent of Requirement Maintained	179.00%
GAIN Global Markets, Inc.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.4
Capital Levels Maintained	2.0
Excess Net Capital	$ 1.6
Percent of Requirement Maintained	500.00%
GAIN Capital-Forex.com Canada, Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.2
Capital Levels Maintained	1.4
Excess Net Capital	$ 1.2
Percent of Requirement Maintained	700.00%
GAIN Capital Singapore Pte., Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.3
Capital Levels Maintained	7.4
Excess Net Capital	$ 7.1
Percent of Requirement Maintained	2467.00%
Trade Facts, Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.6
Capital Levels Maintained	3.5
Excess Net Capital	$ 2.9
Percent of Requirement Maintained	583.00%
Global Asset Advisors, LLC
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.0
Capital Levels Maintained	1.4
Excess Net Capital	$ 1.4
Percent of Requirement Maintained	100.00%
GAIN Capital Payments Ltd.
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.1
Capital Levels Maintained	0.4
Excess Net Capital	$ 0.3
Percent of Requirement Maintained	400.00%
GTX SEF, LLC
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items]
Minimum Regulatory Capital Requirements	$ 0.8
Capital Levels Maintained	1.0
Excess Net Capital	$ 0.2
Percent of Requirement Maintained	125.00%

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SEGMENT INFORMATION - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) market	Jun. 30, 2017 USD ($)	Jun. 29, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of accessible global financial markets | market			12,500
Expenses	$ (74,228)	$ (72,807)	$ (149,657)	$ (145,701)
Intersegment Eliminations
Segment Reporting Information [Line Items]
Expenses	$ 400	$ 600	$ 900	$ 1,100
GTX ECN | Discontinued Operations, Disposed of by Sale
Segment Reporting Information [Line Items]
Disposal group, including discontinued operation, consideration					$ 100,000

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SEGMENT INFORMATION - Selected Financial Information by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Employee compensation and benefits	$ 22,473	$ 23,011	$ 46,811	$ 43,534
Selling and marketing	6,767	7,517	12,737	16,752
Referral fees	10,464	13,312	21,895	29,753
Segment profit (loss)	18,935	25,722	50,772	10,902
Operating Segments | Retail
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenue	74,532	80,605	160,205	120,692
Employee compensation and benefits	13,648	14,405	29,072	27,740
Selling and marketing	6,496	7,244	12,161	16,150
Referral fees	7,040	9,826	14,726	22,149
Other operating expenses	18,279	15,217	36,011	28,620
Segment profit (loss)	29,069	33,913	68,235	26,033
Operating Segments | Futures
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenue	12,100	10,013	23,591	20,980
Employee compensation and benefits	2,863	2,494	5,374	5,045
Selling and marketing	202	221	443	486
Referral fees	3,424	3,486	7,169	7,604
Other operating expenses	3,556	3,234	7,349	6,976
Segment profit (loss)	2,055	578	3,256	869
Corporate and Other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Net revenue	(2,447)	(27)	(1,251)	99
Employee compensation and benefits	5,962	6,112	12,365	10,749
Selling and marketing	69	52	133	116
Other operating expenses	3,711	2,578	6,970	5,234
Segment profit (loss)	$ (12,189)	$ (8,769)	$ (20,719)	$ (16,000)

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SEGMENT INFORMATION - Reconciliation of Operating Segment Profit to Income Before Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
SEGMENT PROFIT	$ 18,935	$ 25,722	$ 50,772	$ 10,902
Depreciation and amortization	5,341	4,121	10,709	7,949
Purchased intangible amortization	3,612	3,817	7,280	6,883
Restructuring expenses	25	0	25	0
Impairment of investment	0	0	(130)	0
OPERATING PROFIT/(LOSS)	9,957	17,784	32,888	(3,930)
Interest expense on long term borrowings	3,388	2,694	6,728	5,359
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE/(BENEFIT)	6,569	15,090	26,160	(9,289)
Operating Segments | Retail
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
SEGMENT PROFIT	29,069	33,913	68,235	26,033
Operating Segments | Futures
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
SEGMENT PROFIT	2,055	578	3,256	869
Corporate and Other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
SEGMENT PROFIT	$ (12,189)	$ (8,769)	$ (20,719)	$ (16,000)

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SUBSEQUENT EVENTS - Additional Information (Detail)	Jul. 26, 2018 $ / shares
Subsequent event
Subsequent Event [Line Items]
Common stock dividend declared (usd per share)	$ 0.06