Executive Summary: GFI Group (NYSE:GFIG) was approved by the Commodities Futures Trading Commission as a Swap Execution Facility on September 13. While this dramatic market transformation will eventually reduce margins, GFI has long been uniquely prepared for it. The new market dynamics will vastly increase the company's potential market share and break the historically linear relationship between expenses (largely broker compensation) and profits, leading to a new era of growth.
In 2007, GFI Group was high-flyer. Almost immediately from its IPO, at the beginning of 2005, the stock began to rise, from the $6 range to peak at $25 per share. GFI's business in credit derivatives was booming, and it was not just the stock price...
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