Cyprus (Forex)

HOW TO OBTAIN FOREX LICENSE IN CYPRUS

You have decided to provide brokerage services in Europe and you think about what country to choose to get a suitable financial license?

We recommend you Forex license in Cyprus!

Why Cyprus?

Cyprus has a lot of advantages:

• Receiving authorization in CySEC, the company is allowed to conduct its activities in all the other 27 EU countries as well as in Iceland, Norway and Liechtenstein (under the MiFID).
• There is a longstanding practice of issuing investment and brokerage licenses in Cyprus.
• The specially trained personnel work for Cyprus Securities and Exchange Commission.
• Unlike other EU countries, Cyprus provides clear requirements for obtaining a brokerage license.
• Cyprus has registered a clear regulation and control system over the companies that have obtained the license.
• Regulatory system of Securities and Exchange Commission constantly updates and evolving.
• In 2004 Cyprus joined the European Union. Since then, the Cypriot legislation tends to full harmonization with EU legislation.

Read also a related theme articles (in russian)

• Obtaining forex license in various European countries.

• AUTHORIZED CAPITAL OF CYPRUS FOREX. How much money to prepare for conducting forex business in Europe?

• How to choose the jurisdiction to obtain forex license?

Regulatory Authority

The Cyprus Securities and Exchange Commission (CySEC) – Since 2009, forex trading and other investment activities are controlled by the state commission.

Licensed Activities

• receiving and transmitting orders relating to one or more financial instruments

• execution of orders on behalf of clients

• operation with private account

• portfolio management

• investment advice

• underwriting of financial instruments and / or placing financial instruments on a firm obligation basis

• placement of financial instruments without a basis of firm obligation

• operation of the multilateral trade funds

Legislation

The Cyprus Investment Services and Activities and Regulated Markets Law of 2007 CySEC directives № 144-2007-03, № 144-2007-04, official notification from 17.06.2009 and 06.11.2009, about Forex licensing activities, The Markets in Financial Instruments Directive (MiFID). In Cyprus, the MiFID directive was implemented by coming into effect the Act of 01.11.2007.

Forex License. Passportization in the EU

About certification: according to MiFID, paragraph 31 every Member State of a European Economic Area (EEA) must provide a freedom in maintaining of investment and ancillary services listed in the license on its territory for companies that obtained licenses there and are regulated with the competent authorities of other EEA Member States. Wherein, ancillary services cannot be provided separately from investment services by the investment company.
Thus, the company, that received a license for provision investment and ancillary services of one of the EEA Member States, has the right to certify (i.e. to get permission for provision the services specified in the license) and provide specified in the license investment and ancillary services on the territory of other EEA Member States which have implemented the MiFID, specifically on the territory of such jurisdictions as: Austria, Belgium, Bulgaria, Great Britain, Hungary, Germany, Greece, Denmark, Ireland, Iceland, Spain, Italy, Cyprus, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Finland, France, Sweden, the Czech Republic, Estonia.
Certification of brokerage license in Eurozone is regulated by MiFID.

Ready-made companies with forex licenses

Currently there are two Cyprus companies with ready forex licenses (2013 and 2014) available for sale.
Types of activity: Reception and Transmission; Execution of orders; Portfolio Management; Provision of Investment Advice.

For details, please please, feel free to contact our specialists via phone-call (numbers required can be found in contact list on the internet page) or by e-mail info@dev.sb-sb.com

Key requirements

1. The Cyprus Investment Company is obliged to develop an organizational structure of the company, to prepare rules on counteraction money laundering company policy and “know your customer” policy, develop company business plan.
2. The Cyprus Investment Company is obliged to open a bank account at a local bank.
3. The Cyprus Investment Company is obliged to deliver monthly capital adequacy reports, conduct an annual internal audit, annual external financial audits, do the annual reports on compliance CIF to the CySEC requirements, reports on risk management, financial reports.
4. CySEC controls CIF over reports on financial compliance with the company, on a professionalism of employees through monthly CIF reports on capital adequacy.

Personnel requirements

• Board of Directors: 2 Managing Director and CEO
• Secretary (Back office)
• Internal Auditor
• Risk Manager
• 2 certified traders
• Compliance Officer
• Compliance Officer (Money Laundering)
• The head of the brokerage department
• Head of Financial Department
• Head of IT department
• Senior Accountant

The majority of Board members must be residents of Cyprus. Requires professional experience and good reputation of the director (banking / financial sector), the traders must have corresponding certificates confirming qualifications and experience. However, some positions may be taken by the same specialist.

Nominee service is not accepted.

Requirements for the office

The Cyprus Investment Company must maintain full-fledged office in Cyprus. During the company activity, some functions can be performed from abroad. However, the minimum functions should be provided in Cyprus.

The approximate cost of maintaining the office work, including the rent, the purchase of computer equipment and office equipment, telecommunication services, salaries of the minimum required number of managers and employees, the services of internal and external auditors, ranging from 130,000.00 to 170,000.00 euro per year. This amount does not include the labor costs of the two top officials of the company – the CEO and the chief accountant.

Requirements for the authorized capital

Depending on the type and quantity of services that company expects implement its minimum authorized capital should not be less than:

1. 80,000.00 euros (receiving and transmitting of trading directives of clients, providing investment consultations and advices)
2. 125,000.00 euros (receiving and transmitting of trading directives of clients, providing investment consultations and advices, performing trading directives of clients, management of the clients investment portfolio, STP license)
3. 730,000.00 euros (implementation of trade operations on the stock exchange, market maker)

A company that obtained the license of, must maintain equity capital at a level not less than indicated above.
However, the company’s capital may be invested in highly liquid, not risky assets, which are determined by the Securities and Exchange Commission.

The criteria for successful obtaining of a license

• full authorized capital
• good reputation of shareholders
• qualified and experienced Board of Directors
• technical and financial equipment
• operating procedures, policies
• infrastructure

Costs

The cost of our services for the full process of registration and licensing will be EUR 19,000 (+ VAT, in cases where it is necessary) plus additional costs. VAT in Cyprus is 19%.

This amount should be paid in such order: 50% before starting work and 50% after confirmation the application by CySEC (other competent authorities).

We commit ourselves to:

a) facilitate and promote your application to CySEC;

b) to design and build company structure according to the business nature and requirements;

c) to prepare the necessary manuals individually and based on customer requirements;

d) prepare anti money laundering policy (AML) and know your costumer policy (KYC), guided by the requirements and wishes of the customer;

e) prepare a Business Plan according to the requirements of the CySEC;

f) complete the filling of the application form;

g) check CIF shareholders, directors and chairmen of departments CIF questionnaires;

h) find qualified executive and non-executive directors (if needed);

i) find qualified executive directors and traders / dealers (within the required period of time);

j) complete the corresponding control forms and questionnaires;

k) prepare the necessary justification according to the submitted application that will be presented to CySEC;

l) to prepare the accompanying application letter, in cases if an additional questions will be asked by CySEC;

m) accompany the customer in providing all necessary documentation and information;

n) contribute in implementation of licensing requirements and conditions, as well as negotiations with the CySEC for license activation;

o) fee for membership in the Association of Cyprus International Investment Firms (ACIIF);

p) to be responsible on your behalf before the CySEC in cases of requests, proposals related to applicative process that can take from 3 to 6 months (depending on how quickly answers are provided).

Deadlines

From 6 to 14 months (including preparation of documents).

SBSB offers qualified assistanse in obtaining brokerage licenses in Cyprus and other jurisdictions.
Please check all the list below on page.

If any help in obtaining brokerage license need, please, feel free to contact our specialists via phone-call (numbers required can be found in contact list on the internet page) or by submitting a form located on the left side of the page.

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