FX week in review: Finalto/Markets.com sold, sports sponsorships, Cyprus broker banned

Gerald Segal 0 Comments May 29, 2021

The big FX industry news story of the week was the long-anticipated sale by Playtech of B2B and B2C brokerage group Finalto, which includes the CFH Group and Alpha Capital Markets businesses (liquidity, risk management for brokers, market making) as well as the CySEC-licensed Markets.com Retail FX brand.

While Playtech’s press release proclaimed a $210 million sale – a headline which most other FX blogs basically copied and blasted out in emails and social posts – our coverage at FNG unveiled that the true sale price was less than half that amount.

It seems as though the agreement between Playtech and the buyer group took nearly a year to complete because the two sides were far apart on price (frankly, not uncommon in the M&A world). Playtech eventually came down in price, but as shareholder approval is still required it decided to “package” the deal as a $210 million sale, despite the true sale price being less than half that.

We explain below.

Other interesting stories and trends this past week included a flurry of sports sponsorships by FX brokers, including a front-of-shirt deal with a Top-5 EPL football team, and a CySEC-licensed FX broker being banned by the FCA for sending traders to its offshore entity.

Some of the top FX industry news stories to appear this week on FNG included:

Playtech finalizes $101M sale of Finalto, Markets.com to Barenboim group. Well it looks like online gaming tech provider Playtech (LON:PTEC) is going to get its wish after all, and exit the Forex business. However it will not exactly be getting the $200-$250 million previously reported. After FNG reported exclusively back in August that Playtech had engaged investment bankers (UBS) to sell what it calls its Financials division – consisting mainly of the Finalto (formerly CFH Group and Alpha Capital Markets) multi-asset B2B business and the Markets.com Retail FX brokerage arm – and then another exclusive FNG report in January that Playtech had identified a buyer for Finalto with a deal being negotiated in the $200 million range, the company announced this morning that an agreement had been finalized which will see Finalto / Markets.com offloaded.

FCA orders EverFX to stop offering CFDs to UK customers. The UK Financial Conduct Authority (FCA) today announces that it has taken action to stop a Cypriot-based firm, ICC Intercertus Capital Ltd, and other members of its group which trade as EverFX, from offering high risk CFDs to UK investors. The EverFX Group used the fact that ICC Intercertus was regulated in the UK to convey legitimacy. However, many consumers were subsequently induced to transact with overseas members of the EverFX Group, which had no authorisation to provide regulated services in the UK meaning that consumers lacked the same level of protection. The FCA identified serious concerns with the sales and marketing practices of the EverFX Group, including the use of misleading financial promotions, failing to inform consumers about the nature and risks of CFDs, applying pressure to invest additional funds, instructing clients on which trades to make, and failing to allow customers to withdraw funds.

Retail FX broker FBS signs as shirt sponsor of Leicester City. English Premier League team Leicester City has announced that it has signed a new three-year agreement with global online trading company FBS as its principal club partner. The partnership will begin with the 2021/2022 season, with the Foxes wearing the new shirts with the FBS logo for the first time in the final Premier League match against Tottenham Hotspur at King Power Stadium on Sunday 23 May. The parties said that the partnership will bring together the 2015/16 Premier League champions and 2021 FA Cup winners with one of the world’s fastest-growing financial services companies.

IG becomes official partner of England Cricket. IG, a global leader in online trading and investments, has today been announced as an Official Partner of England Cricket. The partnership will see IG support both the men’s and women’s teams, with the IG logo appearing on the men’s shirt across all three formats of the game. As a company that empowers ambitious individuals to pursue their own investing strategies, IG is excited to work with the ECB as it seeks to inspire generations through elite performance, increased accessibility and a commitment to its communities. The partnership gives IG the perfect platform on which to build awareness of its brand and range of investment products, as well as widespread opportunities to create inspiring experiences for its clients and further the goals of its Brighter Future initiative.