KCG Holdings, Inc. (NYSE: KCG) today announced it has entered into a definitive agreement to sell certain assets and liabilities related to the Futures Commission Merchant (KCG Futures) business to Wedbush Securities Inc, representing the second example of a US based firm transferring an entire business unit to another company in the space of a week.
Terms of the transaction were not disclosed, and the transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed by year end.
A division of KCG Americas LLC, KCG Futures provides futures execution, clearing and custody services.
KCG Futures facilitates futures and commodities transactions among brokers, institutions, market professionals and non-clearing FCMs on major U.S. and international futures and options exchanges as well as FX clearing.
It is anticipated the existing KCG staff, comprised of approximately 45 professionals in the U.S., will continue in their current roles and client contacts will remain the same.
“KCG Futures is a leading independent futures broker and has maintained a solid reputation for high-quality client service,” said Daniel Coleman of KCG. “This transaction is a positive development for everyone involved. KCG Futures will join the Wedbush team, where it can further position itself as a leader in the marketplace, allowing Wedbush to expand its futures clearing and execution services. The transaction not only reduces and simplifies KCG’s balance sheet, it also allows us to focus additional resources and energy on our primary businesses of market making, agency execution and trading venues.”
Following the transaction close, KCG will continue to engage in futures market making.
KCG was advised on the transaction by Sullivan & Cromwell LLP.
For the full announcement, click here.