How to obtain forex broker license

How to obtain forex broker license

The end of the gold standard was the starting point for the creation of Forex is an international…

The end of the gold standard was the starting point for the creation of Forex is an international currency market providing the chance to make money on currency fluctuations. The Forex broker license is required to carry out legal operations and intermediation. Let’s take a closer look at the Forex license, where and how to get it. 

What is broker license 

The broker license is the permission of the regulators of countries to carry out broker activity on its territory. It gives the right to make transactions of currency, securities, and precious metals on behalf and at the expense of the customer or on their own behalf and at the expense of the customer. It also indicates the regulator that controls the broker’s activity, while identifying the reputation and reliability before the potential clients (regulators oblige the broker to provide high-quality services and insure clients’ funds in case of bankruptcy). 

Regions that issue broker license

Forex itself does not have a centralized regulator. Licensing is under the authority of central banks or independent financial commissions that certify a broker for compliance with the requirements for licensing. 

If you aim to work in the EU territory, SBSB fintech lawyers recommend obtaining the license in Malta or Cyprus. Vanuatu forex license enables trading using traditional financial instruments and virtual assets. The USA, Great Britain, New Zealand, Australia, Latvia, Estonia, Czechia, Switzerland, Panama, Hong Kong, Mauritius, and Belize license forex business on their territories. Seychelles Brokerage License is issued by Seychelles Financial Services Authority. 

The choice of a specific jurisdiction depends on the size of the business, the budget you are ready to allocate for the license, trading stability and security, the reputation of the registration region on the world stage, and time (the request can be replied in a year). 

Every region has different terms of registration, however, some basic factors are taken into account:

  • the share capital of a certain amount;
  • employees with corresponding financial and economic education (CEO, accountant, ANL Officer);
  • if the license is obtained by an individual, an update on the bankruptcy status must be provided.

Types of broker license 

The most popular licenses are:

  • British FCA (Financial Conduct Authority) license is distinguished by severe requirements for licensees:  full compliance with the statutory requirements, physical presence in the territory of the State (local office and CEO who lives in Great Britain), management from the jurisdiction, share capital of €750 000;
  • ASIC (Australian Securities and Investments Commission) license provides residential company registration (A private (i.e. “Pty Ltd”) company), that can be established by 100% non-residents of Australia, while at least 1 CEO must be an Australian resident;
  • MFSA license enables enlarging business in the European territory. The share capital size depends on the category (€125 000-730 000), and the real office in Malta is obligatory;
  • CySEC license enables selling and receiving clients’ deposits and is distinguished by low income taxes (10% for Cyprus operations and 0% for transactions outside the country), allows financial activity in every country-member of EU;
  • Seychelles Brokerage License SFSA is issued within 90 days. Share capital requirements — $50 000.

How to obtain broker license 

First, you should choose the jurisdiction. Regardless of geographical location, the actual operation can be carried out in any country. Whatever “residence permit” a broker chooses, basic requirements for enabling documentation must be met:

  • collect the set of documents;
  • register the company as an existing business;
  • make a business plan;
  • pay a state fee;
  • set AML/KYC procedures required;
  • open a corporate bank account;
  • activate a trading account;
  • apply for a license.

SBSB specialists ensure legal support to obtain a Vanuatu forex license and Seychelles Forex License from the moment of applying up to obtaining permission. We work with other jurisdictions as well while focusing on the clients’ requests depending on the country they are aimed to act. Vanuatu forex license is distinguished by the low requirement for share capital, and the possibility to open bank accounts both in Vanuatu and other European payment systems. Seychelles Brokerage License is suitable for early-stage projects and is distinguished by loyal taxation. 

We provide our clients with individual solutions, taking into account jurisdiction regulations, budget, residency, and other peculiarities. 

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