Currently considered one of the top offshore forex license options, the Belize forex license has established itself among one the best to have. With a higher capital requirement, the Belize option provides some insight into the level of capital available and seriousness of the Broker associated. Belize also offers a favourable Tax framework. Although there are reporting requirements, physical presence for board meetings is not required (with other solutions being acceptable). Belize maintains a good reputation in trader communities (compared to other offshore jurisdictions).

 

to answer the most frequently asked questions we receive on a Belize Forex License:

 

• Local office with at least 1 employee is a requirement
• The capital requirement is $500,000

 

How does someone start the process to obtaining a Belize Forex License?

 

As with most licenses, the first step is the formation / incorporation of a Belize company followed by the process of collecting/submitting the necessary documents and finally evaluation and approval/rejection of the license by the regulator. Further questions, documents might be requested throughout the process but with the final approval, the license fees are paid to the regulator and the steps for opening a corporate bank account to deposit the capital requirement can start.

If you have Institutional business as a network and operate through a forex IB or White Label program, jurisdictions like Belize may be considered a “pricier” option when considering to start your own brokerage, but it does give a strong impression regarding the seriousness of your business. Unlike working unregulated, Belize will provide comfort to your clients who need a regulated broker to support their trading needs.

 

Find out which brokers are registered in Belize today as well as the country’s latest economic data.

 

In this regard, some of the documents required (but not limited to) are:

• An accurately completed application form, signed and notarized
• Details and Data on directors and shareholders with documentary evidence of information provided
• Copies of passports, proof of country residence and bank statements separately on each shareholder and director all of which must be notarized
• A CV for each shareholder and director
• A comprehensive business plan
• Clean criminal record from each of the respective countries of origin for each of the directors / shareholders
• Letters of reference from Banking Providers

All documents that are presented in the case for application and company formation should be complete, duly signed and notarized by a Belize notary. If the original documents are not in English, these should be translated and certified locally. For government issued documents, there may be a requirement for these to be apostilled.

 

Information on the corporate structure requirements of a Belize forex license

 

Shareholders and Directors are not required to reside in Belize, however they are required to have appropriate background and experience fitting their roles. They should have a clean criminal record. There must be a local director (Belize resident) on the board. In order for the process of the license to begin, a local entity must be established with all the relevant documents and information submitted. Belize is FATCA compliant, but still maintains the discreet handling of banking and transaction details.

A company that is looking to acquire a Belize license, will be required to have a capital adequacy of no less than $500,000 and will be required to pay a yearly fee of $25,000. The company will be required to keep up-to-date records and maintain regular reporting with the regulator at the prescribed periods (Reporting will include – but not limited to – capital, income, as well as the number, volumes and values of all executed trades. It is important to select the name of the company correctly and according to the guidelines of the Belize authorities.

In order to benefit from the various corporate incentives for operation of international business, it is important to note that no transactions should be conducted with local Belize entities or individuals and that the Belize Dollar should not be a currency offered for trade / transaction.

 

Looking for a Belize Forex License? Contact us today too look into the details

Time frames to get the Belize forex license:

It’s in the discretion of the national regulator to approve, ask questions or even reject any application depending on its complexity and structure. Process should be completed within 3-6 moths from submission of application. Our initial (internal) assessments are usually enough to identify problems (if any) in the early stages, thus maintaining excellent time frames.

 

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How allFX-Consult can step into this picture:

allFX-Consult is a capital markets and forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer so that we can meet any forex corporate challenge.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss your case through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com.

#forexlicense #offshorelicense #belizeforexlicense #forexib #whitelabel

You might find this interesting

Top EU and Offshore jurisdictions | Including brokers registered there & the country’s economic data

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What is a Forex White Label – should you go ahead and get one?

Following the publication on the 5^th of December, 2019 in the EU Official Journal regarding the Investment Firms Directive (IFD) and Investment Firms Regulation (IFR), the new IFD/IFR regime came into force on the 26^th of June, 2021 as originally planned.

The idea behind the new IFD/IFR framework is to separate (via classification) past regulatory standards set to regulate large banking groups with regulatory standards proportionate to the size/activities/risk of Investment Firms, at EU level.

Although designed for reasons more sophisticated than a simple description, IFD/IFR aims to regulate in such way that depending on the business practices, size and interconnectedness with other players, a potential failure of the investment firm can be “wound down in an orderly manner with minimal disruption to the stability of the financial markets”.

The larger scale firms will be classified as Credit Institutions and be regulated according to those standards, whereas for the rest of the Investment Firms, capital requirements will be calculated according to a Permanent Minimum Requirement, a Fixed Overhead Requirement and a new set of standards called K-Factors.

K-Factors take into consideration all those characteristics that pose a threat – external/internal (Risk to Customer, Risk to Market and Risk to Firm) – and calculate the requirements accordingly.

A practical guide to the IFD/IFR was published by CySEC with all the relevant information. The guide’s link can be found in Circular 355, point 6. A summary of the guide is provided below.

 

Under the IFD/IFR framework, there are four (4) classes of Investment Firms:

 

Class 1A – Characteristics:

• Investment Firm with current initial capital requirements of Euro 730,000 [that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU (points (3) and (6) of Part I, Annex I of the Law)]
• systemically important firm due to the Risk to Market threat its size and activities pose
• will seek authorization as a Credit Institution
• is not a commodity and emission allowance dealer
  • bet you didn’t know that emission allowance dealer was a thing, did ya? Google, also a thing, states the following “to incentivise firms to reduce their emissions, a government sets a cap on the maximum level of emissions and creates permits, or allowances, for each unit of emissions allowed under the cap. For a given permit price, some firms will find it easier, or cheaper, to reduce emissions than others and will sell their permits via a dealer.”
• is not a collective investment undertaking “not investing  funds in various securities, real estate and other assets, with the sole aim of spreading investment risks”
• is not an insurance undertaking “authorised under the law of a territory within the EEA to carry on insurance business”
• the total value of the consolidated assets of the undertaking is equal to or exceeds EUR 30 billion
• the total value of the assets of the undertaking is less than EUR 30 billion, and the undertaking is part of a group in which the total value of the consolidated assets of all undertakings in that group that individually have total assets of less than EUR 30 billion and that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 30 billion
• the total value of the assets of the undertaking is less than EUR 30 billion, and the undertaking is part of a group in which the total value of the consolidated assets of all undertakings in the group that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 30 billion.

 

Class 1B – Characteristics:

• Investment Firm with current initial capital requirements of Euro 730,000 [that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU (points (3) and (6) of Part I, Annex I of the Law)]
• will remain under CySEC supervision under CRR2/CRDV for prudential requirements(article 1(2) of IFR).
• is not a commodity and emission allowance dealer
• is not a collective investment undertaking
• is not an insurance undertaking
• total value of the consolidated assets of the investment firm is equal to or exceeds EUR 15 billion
• the total value of the consolidated assets of the investment firm is less than EUR 15 billion, and the investment firm is part of a group in which the total value of the consolidated assets of all undertakings in the group that individually have total assets of less than EUR 15 billion and that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 15 billion
• the investment firm is subject to a decision by the competent authority in accordance with Article 5 of IFD.

 

Class 2 – Characteristics:

• default categorization for Investment Firms
• large Investment Firms not classified as Systemically Important, they pose little to no threat to financial markets stability
• will be subject to new Remuneration rules
• an investment firm is categorized as Class 2 if it no longer meets any of the conditions mentioned in point Class 3 below
• will be subject to all IFR rules.

 

Class 3 – Characteristics:

• subject to IFR but with limited scope
• non-Systemic SNI (defined as small and non-interconnected investment firms)
• They don’t undertake higher risk activities
• They don’t hold client money or client securities
• AUM (Assets Under Management) measured in accordance with Article 17 is less than EUR 1,2 billion;
• COH (Client Orders Handled) measured in accordance with Article 20 is less than either: – EUR 100 million/day for cash trades; or – EUR 1 billion/day for derivatives;
• ASA (Assets safeguarded and administered) measured in accordance with Article 19 is zero;
• CMH (Client Money Held) measured in accordance with Article 18 is zero;
• DTF (Daily Trading Flow) measured in accordance with Article 33 is zero;
• NPR (Net Position Risk) or CMG (Clearing Margin Given) measured in accordance with Articles 22 and 23 is zero;
• TCD (Trading Counterparty Default) measured in accordance with Article 26 is zero;
• The on‐ and off‐balance‐sheet total of the investment firm is less than EUR 100 million; 5
• The total annual gross revenue from investment services and activities of the investment firm is less than EUR 30 million, calculated as an average on the basis of the annual figures from the two‐year period immediately preceding the given financial year. Investment firms under class 3 will be subject to the new IFR/IFD regime but with certain exceptions.

 

IFD/IFR Capital Requirements for Class 2 and 3:

 

PMR – Permanent Minimum Capital Requirement depending on activities

€75,000 – Not permitted to hold client money or securities belonging to its clients

• Reception and transmission of orders in relation to one or more financial instruments
• Execution of orders on behalf of clients
• Portfolio management
• Investment advice
• Placing of financial instruments without a firm commitment basis

€750,000

• Dealing on own account
• Underwriting and/or placing of financial instruments on a firm commitment basis
• Operation of an Organised Trading Facility (where the investment firm engages in dealing on own account or is permitted to do so

€150,000

All other Investment Firms

 

FOR – Fixed Overhead Requirement

• Set to at least ¼ of preceding year’s fixed overheads
• Excludes variable overheads such as profit shares, fees to tied agents, non-recurring expenses, variable remuneration, losses from trading on own account, tax expenditures

 

KFR – K-Factor Capital Requirement (for Class 2 firms)

• K-factors are quantitative indicators targeting the measurement of the risk posed by the investment firm to its customers (RtC) and to the market (RtM) but also the risk posed to the firm itself (RtF).
• A coefficient is used to multiply the K-Factor, with the result being the capital requirement. 

 

Risk to Client (RtC)

K-AUM: Assets under management – under both discretionary portfolio management and non-discretionary advisory arrangements of an ongoing basis (Art. 17 – IFR).

Coefficient – 0,02%

K-CMH: Client money held – captures the risk of potential for harm where an investment firm holds money for its customers taking into account the legal arrangements in relation to asset segregation and irrespective of the national accounting regime applicable to client money. Excludes client money that is deposited on a (custodian) bank account in the name of the client itself, where the investment firm has access to these client funds via a third-party mandate. (on segregated or non-segregated basis) (Art. 18 – IFR).

Coefficient – 0,4% (on segregated accounts) 0,5% (on non-segregated accounts)

K-ASA: Assets safeguarded and administered – ensures that investment firms hold capital in proportion to such balances, regardless of whether they are on its own balance sheet or in third-party accounts (Art. 19 – IFR).

Coefficient – 0,04%

K-COH: Client orders handled – captures the potential risk to clients of an investment firm which executes its orders (in the name of the client, not in the name of the investment firm itself). (Art. 20 – IFR).

Coefficient – 0,1%

 

Risk to Market (RtM)

K-NPR: Net position risk – based on the market risk framework (standardised approach, or if applicable, internal models) of the CRR (Art. 22 – IFR)

Or K-CMG: Clearing member guarantee – Investment firm’s clearing member – where permitted by a Member State competent authority for specific types of investment firms which deal on own account through clearing members, based on the total margins required by an investment firm’s clearing member (Art. 23 – IFR)

 

Risk to Firm (RtF)

K-DTF: Daily trading flow – based on transactions recorded in the trading book of the investment firm dealing on own account, whether for itself or on behalf of a client, and the transactions that an investment firm enters through the execution of orders on behalf of clients in its own name. (Art. 33 – IFR)

Coefficient – 0,1% for cash trades, 0,01% on derivatives

K-TCD: Trading counterparty default – investment firm’s exposure to the default of their trading counterparties in accordance with simplified provisions for counterparty credit risk based on the CRR (Art. 26 – IFR)

K-CON: Concentration – concentration risk in an investment firm’s large exposures to specific counterparties based on the provisions of the CRR that apply to large exposures in the trading book. (Art. 39 – IFR).

 

IFD/IFR – Own funds requirements

 

Investment firms shall have own funds consisting of the sum of their Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital, and shall meet all the following conditions at all times (Art. 9 of IFR):

• Common Equity Tier 1 capital /D >= 56% D
• [Common Equity Tier 1 capital + Additional Tier 1 capital] /D >= 75% D
• [Common Equity Tier 1 capital + Additional Tier 1 capital + Tier 2 capital] /D >= 100% D

Where D is the highest of own funds requirements as defined in Art. 11 of IFR and described above as:

• Fixed overheads requirement (FOR)
• Permanent Minimum capital requirement (PMR)
• K-Factor Requirement (KFR)

 

Concentration Risk Requirements

Concentrated Risk to an individual client or group of clients is limited to 25% of the Investment Firm’s own funds

 

Liquidity requirements

Investment firms under class 2 and class 3 (subject to exemptions) shall hold an amount of liquid assets equivalent to at least one third (1/3) of the Fixed overhead requirement, calculated in accordance with Art. 13(1) of IFR.

 

Disclosure requirements

• risk management objectives and policies (Art. 47 – IFR)
• internal governance arrangements (Art. 48 – IFR)
• own funds requirements (Art. 49, 50 – IFR)
• remuneration policy and practices (Art. 51 – IFR)
• investment policy (Art. 52 – IFR)
• environmental, social and governance risk (Art. 53 – IFR)

 

Reporting requirements

For deadlines on submission dates please refer to Circular 442 – published on April 21, 2021

• Level and composition of own funds
• Own funds requirements
• Own funds requirement calculations
• Where the firm is a Class 3 firm – the level of activity, including the balance sheet and revenue breakdown by investment service and applicable K-factor
• Concentration risk
• Liquidity requirements

 

Its very important for all new and existing Cyprus Investment Firms (CIFs) to familiarize themselves with the IFD/IFR framework, its obligations and templates. The IFR became fully applicable to all EU member states on the 26th of June, 2021. The IFD was transposed into national legislation and entered into force the same day.

Useful links

• Circular 355
• Practical guide issued by CySEC 
• CySEC License
• Mifid II

 

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer, ensuring we can meet any corporate challenge relative to how to start a forex brokerage.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss any forex related topic through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com. We specialise in training sales teams and forex corporate structures for individuals/corporations that want to Start a Forex Brokerage.

 

You might also be interested in:

Top EU and Offshore jurisdictions | Including brokers registered there & the country’s economic data 

Comprehensive list of worldwide regulators and supervising bodies

What is a Tied Agent | Definitions and detailed information

 

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In November of 2012, the St Vincent and the Grenadines FSA (Financial Services Authority) was established to control the island‘s financial industry, as demand for registrations and company incorporations was increasing drastically. As always, not far behind followed a good number of companies looking into becoming a St Vincent and the Grenadines forex broker.

It’s important to take into consideration, that although the name FSA in most jurisdictions actually means supervision, regulation, fines, reporting, audits etc, in St Vincent and the Grenadines, forex activity still remains unsupervised and for all intends and purposes, unregulated.

By registering a company as a St Vincent and the Grenadines forex broker, by no means does it imply regulation and the FSA itself warns everyone to be cautious of forex trading websites and forex brokers that claim to be “regulated” under their authority.

 

Firstly, to answer the most frequently asked questions we receive:

• Local office and employees are not a requirement
• There is no capital requirement since there is no regulation
• Important – you cannot open a bank account as a forex brokerage (more about this below)

 

So how does someone become a St Vincent and the Grenadines forex broker?

Straight forward process of collecting/submitting documents and incorporating a company. Once everything is done, the broker can proceed with bank arrangements (extremely hard if not impossible), systems and overall operations setup.

The documents required for incorporation are:

• Signed application
• Notarised copy of Passport
• Notarised government Utility Bill (water, electricity – not older than 3 months)
• Bank reference letters for Shareholder(s) and Directors (if available)

 

Looking to incorporate a company in St Vincent & the Grenadines? Contact us to look into the details

 

Information on the corporate structure of a St Vincent and the Grenadines forex broker

At least one shareholder and at least one director are required. The company can be up and running with a wide range of types of shares including registered or bearer shares, voting shares, non-voting shares, shares which may have less than 1 vote per share, common shares, preferred shares, limited shares, shares limited by guarantee or redeemable shares, and shares which entitle participation only in certain assets. The company must maintain a registered office and a secretary and there is excellent privacy control with regards to publicising the names of the shareholders and directors. The company can manage the business from anywhere in the world, no annual external audit requirements and this is basically it.

Most cases we come across that look into becoming a St Vincent and the Grenadines forex broker, are Institutional businesses/networks that operate through a forex IB or White Label program, as a pre-step before moving forward into more complex and expensive alternatives. Remember though that to start your own brokerage, requires more than an incorporated company or regulation, like banking, psp’s and solid sales/marketing plans.

 

Why register as a St Vincent and the Grenadines forex broker?

Some key characteristics of a St Vincent and the Grenadines forex broker include but are not limited to the very low costs and fast set up compared to most regulated jurisdictions, no limits on share capital (a company can start with $1), exemptions from corporate taxes, income taxes, capital gains, no annual reports, no limitations with physical offices and employees.

Although all of the above are such great conditions for the forex brokerage, it can mean doomsday and hellish conditions for traders that fall victims to a few, not so straight forward unregulated entities.

That being said, we want to make sure that we balance the scales a little bit. Most review websites that pretend to be a forex trader’s best friend warn caution, run disclaimer campaigns, raise massive red flags about trading with forex brokers registered in offshore jurisdictions. In most cases, only because of the jurisdiction, a broker is instantly labelled as scam.

We need to be careful because there are quite a few brokers that don’t run chop shops but instead use these offshore registrations to reach milestones that will enable them to get licenses in more reputable jurisdictions in the near future. Many of today’s top brokers started the same way. Unregulated, in a sunny tropical location, with no office or employees, but a solid plan that led to growth, offices and licenses in more reputable jurisdictions.

 

Find out which brokers are registered in St Vincent today as well as the country’s latest economic data.

 

Just because an investor has the funds to pay the crazy costs of a reputable jurisdiction, by no means does it imply that he/she does not run a chop shop. No regulation can prevent misbehaviour in its entirety and if you are a serious industry player, you know that’s true. Yes, the regulated “big” brokers get fines, warnings, extra hassle in reporting, massive costs and guidelines to work with but does this stop them from running clandestine dealing rooms and iffy risk management? Anyone who thinks this is the case is up for small, big, explosive hiccups in their forex trading experience.

To summarise this, some of these offshore companies are so small, that you don’t even speak with a sales person. You go direct through the owner or director and the relationships you can establish with them, are far more serious/important than dealing with an employee of a heavily regulated company.

All we’re saying is traders must do their due diligence while being extremely cautious, as not everyone is into forex activities to grow a proper business. Knowing who you’re dealing with is a must before depositing funds. That being said – you never know, these “offshore” invisible brokers might actually surprise you.

 

Time frames to get registered:

For all intends and purposes, with the submission of all documents you can be up and running in less than a week. Cautious reminder though – don’t register a company for forex activities before you look into your banking possibilities. If you already did though and you’re stuck, contact us now to examine what to do next.

 

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer so that we can meet any forex corporate challenge.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss your case through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com.

#forexlicense #offshorelicense #stvincentforexbroker #forexib #whitelabel

You might find this interesting

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An excellent alternative to set up a brokerage operation, is under a Vanuatu Forex License. Regulated and supervised by the Vanuatu Financial Services Commission (VFSC), the license gained a lot of respect and interest in recent years mainly due to the low operational cost, more lenient requirements and tax incentives.

The Securities Dealer license application can be prepared and submitted by an international company or individual that must be a Director/officer of the company.

Before moving ahead, it is important to note here that Vanuatu along with Iraq have been commended by the Financial Action Task Force (FATF), the international organisation that lists countries with inefficient measures to combat money laundering, for their efforts to ensure that their framework is strong enough and relevant to current AML/CFT requirements. As a result, in June of 2019, Vanuatu was removed from the FATF Grey List.

 

Firstly, to answer the most frequently asked questions we receive regarding a Vanuatu Forex License:

• Local office (after the amendment act of 2018) is a requirement. The office must maintain software for filing, management and accounting, a business continuity system and server.
• No capital requirements – instead the law requires brokerages to hold a securities bond of $50,000.

 

So how does someone start the process to obtain a Vanuatu Forex License?

Through a comparatively fast procedure, the company is required to register a Vanuatu company, prepare and submit for evaluation all documents pertaining to its ID and activities (current and past activities), a detailed business plan, an AML manual as well as a corporate bank account.

Find out which brokers are registered in Vanuatu today as well as the country’s latest economic data.

 

In this regard, the documents required are:

• Notarised copy of Passport
• Recent notarised government Utility Bill (water, electricity – no older than 3 months)
• Criminal record
• CV and reference letters for Shareholder(s) and Directors
• Bank statement not older than 3 months, confirming the where the funding is coming from
• A certified copy of Academic qualifications (true copy stamp from the university/college is enough) for Shareholder(s) and Directors

Important note: The documents must be in the English language – if they can’t be provided in their original form in English, a notarised English translation must be sent as well.

 

Looking to obtain a Vanuatu Forex License? Contact us to look into the details

 

Information on the corporate structure requirements of a Vanuatu Forex License

The Shareholder of the company can be a legal person, unlike the minimum of 1 Director (that must be pre-approved by the VFSC) and appointed on the board. The Shareholder(s) and Director(s) must have proper backgrounds and experience and their approval is at the discretion of the regulator. The Shareholder(s) and Directors are not required to be residents of Vanuatu.

The Director(s) must have a minimum of 5 years’ experience (proved by the reference letters needed to accompany the application) and shall reside for 6 months of a calendar year in Vanuatu. There must be an AML officer approved and appointed as well as a procedure in place that specifies the officer’s replacement.

Quick note here, it’s also common practice under MiFID2 where brokers are required to maintain a replacement policy for all the key personnel of the company, to avoid any setbacks in their duties due to resignations/removals.

Recent changes

After announcements on guidelines, changes and updates on the conduct of business of forex brokers (that came into effect on January 1^st, 2019), a more clear understanding of reasons for possible application rejection or license revocation is set, minimum professional indemnity insurance for partners, employees and consultants, financial statements are required to be prepared by an independent auditor that is approved by the Commissioner 3 months after the end of the year.

Moreover, the amendment introduces the new classification system that obligates applicants to choose between Class A, B and C Principal’s license, depending on the activities the broker intends to conduct. This classification will further support the VFSC in its supervising duties and control.

Here is the full Amendment Act of 2018

 

Why a Vanuatu Forex License?

Some key characteristics of the Vanuatu Forex License include but are not limited to the very low costs compared to most regulated jurisdictions, the recognition it receives on an international level for its efforts in combating money laundering (important if later the broker will apply for a license with another jurisdiction), the swift adaptation in controlling and supervising uninterrupted relative to the increase in demand for its forex licenses, the favourable tax conditions (no tax on profit or capital gains).

If you have Institutional business as a network and operate through a forex IB or White Label program, jurisdictions like Vanuatu are a great option to start your own brokerage, before moving forward into more complex and expensive alternatives. Unlike working unregulated, Vanuatu will provide comfort to your clients who need a regulated broker to support their trading needs.

 

Time frames to get the license:

Although people/offices will try to convince you that they can get your setup up and running within 4 months (or less), we will refrain from making any promises since it’s in the discretion of the national regulator to approve, ask questions or even reject any application depending on its complexity and structure. Usually our initial internal assessments are enough to identify problems (if any) in the early stages, thus maintaining excellent time frames.

 

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer so that we can meet any forex corporate challenge.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss your case through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com.

#forexlicense #offshorelicense #vanuatuforexlicense #forexib #whitelabel

You might find this interesting

Top EU and Offshore jurisdictions | Including brokers registered there & the country’s economic data 

Comprehensive list of worldwide regulators and supervising bodies

What is a Forex White Label – should you go ahead and get one?

 

The Labuan Forex License gained a lot of respect after the very recent changes in the regulatory regime of more reputable jurisdictions, just like our very own European MiFID ii, which made it inevitable for forex brokers to look into other possibilities to rest their brokerage operations.

Supervised by the Financial Services Authority (Labuan FSA), the arm of the Labuan International Business and Financial Centre (IBFC), a money broking license allows a Forex Broker to operate uninterrupted within a low tax regime, limited restrictions in the corporate structure and a relatively quick setup (relative to the complexity of each case and compared with other jurisdictions).

 

Firstly, to answer the most frequently asked questions we receive regarding a Labuan Forex License:

• Local office and employees are a requirement
• The capital requirements of RM500,000 (approx. $125,000) can be used as operating capital

 

So how does someone start the process to obtain a Labuan Forex License?

Same as with most licenses, the process starts by collecting/submitting documents. After receiving conditional approval by the Labuan FSA, the capital requirements as well as the office set up must be arranged.

Find out which brokers are registered in Malaysia today as well as the country’s latest economic data.

 

In this regard, the documents required are more or less the same:

• Notarised copy of Passport
• Recent government Utility Bill (water, electricity – no older than 3 months)
• Reference letters for Shareholder(s) and Directors from a Bank and a CPA
• Bank statement not older than 3 months, confirming the funds required for the capital requirements (RM 500,000 equivalent to approximately $125,000)
• A certified copy of Academic qualifications (true copy stamp from the university/college is enough) for Shareholder(s) and Directors

Important note: The documents must be in the English language – if they can’t be provided in their original form in English, a notarized English translation must be sent as well.

 

Looking to obtain a Labuan Forex License? Contact us to look into the details

 

Information on the corporate structure requirements of a Labuan Forex License

The Shareholder of the company can be a legal person, unlike the minimum 2 Directors (that must be pre-approved by the Labuan FSA) and appointed on the board. The 2 Directors must have proper backgrounds and experience and their approval is at the discretion of the regulator. The Shareholder(s) and Directors are not required to be residents of Malaysia. There are also no restrictions to where the board holds its meetings although the minutes must be signed by a resident secretary.

An office with minimum annual expenditure of $20,000 and 2 local employees is mandatory, as well as audited financial statements and the filing of annual and tax returns. A RM 5,000 (approx. $1,500) yearly license renewal fee is due before the 15^th of January of the next year.

The Labuan FSA offers a very discreet and private environment for licensed entities, allowing for strict confidentiality and no public disclosures of the beneficial owner’s info.

 

Recent Changes

After announcements on guidelines, changes and updates on the conduct of business of forex brokers (that came into effect on January 1^st, 2018), an approval from the authorities of countries intended to do business in, became mandatory. The Labuan FSA will require this before allowing the broker to commence operations. Transactions in the Malaysian Ringgit are prohibited as well as soliciting Malaysian residents. There are margin requirements and leverage restrictions (although not as bad as Europe and US) that are capped depending on the experience of the trader. Segregated client accounts, time frames for client withdrawals, a detailed business plan and compliance with the AML/CFT Act on money laundering issued by the Central Bank of Malaysia (CBM) are part of the mandatory supervised operations.

Link to the guidelines

 

Why a Labuan Forex License?

Some key characteristics of the Labuan Forex License include but are not limited to the very low costs compared to most regulated jurisdictions, the stability of Malaysia’s political environment, its strategic location relative to potential target countries as it shares the same time zone with major Asian countries like China, Hong Kong, parts of Russia & Indonesia, Philippines and also a small 1 hour difference with parts of Russia, Indonesia, Cambodia, Laos, Bangladesh, Japan, South Korea, Thailand, Myanmar, Vietnam.

If you have Institutional business as a network and operate through a forex IB or White Label program, jurisdictions like Malaysia are a great option to start your own brokerage, before moving forward into more complex and expensive alternatives. Unlike working unregulated, a Labuan license will provide comfort to your clients who need a regulated broker to support their trading needs.

 

Time frames to get the license:

Although people/offices will try to convince you that they can get your setup up and running within 4 months (or less), we will refrain from making any promises since it’s in the discretion of the national regulator to approve, ask questions or even reject any application depending on its complexity and structure. Usually our initial internal assessments are enough to identify problems (if any) in the early stages, thus maintaining excellent time frames.

 

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer so that we can meet any forex corporate challenge.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss your case through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com.

#forexlicense #offshorelicense #labuanforexlicense #forexib #whitelabel

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Understanding the nature of a Forex IB

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A great offshore forex license option, the Seychelles forex license established itself among one the best to have. With a medium sized capital requirement that can later be used for operations, a corporate bank account coming with the package (unlike registering a company in St Vincent and the Grenadines or Marshall islands), no restrictions in the number of clients you can accept, a good reputation in trader communities (compared to other offshore jurisdictions).

 

Firstly, to answer the most frequently asked questions we receive on a Seychelles Forex License:

• Local office with at least 1 employee is a requirement
• The capital requirements are $50,000 and can be used as operating capital

 

How does someone start the process to obtain a Seychelles Forex License?

Same as with most licenses, initially a Seychelles company will need to be incorporated followed by the process of collecting/submitting the necessary documents and finally evaluation and approval/rejection of the license by the regulator. Further questions, documents might be requested throughout the process but with the final approval of the license, the license fees are paid to the regulator and the steps for opening a corporate bank account to deposit the capital requirement can start.

If you have Institutional business as a network and operate through a forex IB or White Label program, jurisdictions like Seychelles are a great option to start your own brokerage, before moving forward into more complex and expensive alternatives. Unlike working unregulated, Seychelles will provide comfort to your clients who need a regulated broker to support their trading needs.

 

Find out which brokers are registered in Seychelles today as well as the country’s latest economic data.

 

In this regard, the documents required are:

• Notarised copy of Passport
• Recent notarised government Utility Bill (water, electricity – no older than 3 months)
• Notarised reference letters for Shareholder(s) and Directors from a Bank and a CPA
• A certified copy of Academic qualifications (true copy stamp from the university/college is enough) for Shareholder(s) ad Directors
• Director(s) and Shareholder(s) CV
• Clean criminal record

Important note: The documents must be in the English language – if they can’t be provided in their original form in English, a notarised English translation must be sent as well.

 

Information on the corporate structure requirements of a Seychelles forex license

There will be a minimum of 2 Directors (that must be pre-approved by the Seychelles FSA) and appointed on the board. The 2 Directors must have proper backgrounds and experience and their approval is at the discretion of the regulator. A compliance office must be appointed that will submit the same documents mentioned above and it can be either a director or an externally appointed person. A local employee will be the point of contact with the regulator and maintain all records. The FSA will visit and make sure the offices are fit for approval. Same as with a Vanuatu forex license, a professional indemnity insurance is required as well as a legal advisor.

Although the application process is straight forward, high demand and increase in number of applications are making it impossible for the regulator to fast process everything. Therefore inevitable bureaucratic delays push the time frames a lot longer (we’ll avoid giving actual examples but in some cases it took an extremely long time), a fact that supports the resale of already approved licenses in hopes to speed up the process.

 

Time frames to get the Seychelles forex license:

People/offices will try to convince you that they can get your setup up and running within 6 months (or less) but we will refrain from making any promises since it’s in the discretion of the national regulator to approve, ask questions or even reject any application depending on its complexity and structure. Usually our initial internal assessments are enough to identify problems (if any) in the early stages, thus maintaining excellent time frames.

 

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer so that we can meet any forex corporate challenge.

Because of this, allFX-Consult always has a counterpart/partner for any corporate structure. Before we make any recommendations, we thoroughly examine all possibilities. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss your case through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com.

#forexlicense #offshorelicense #seychellesforexlicense #forexib #whitelabel

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What is a Forex White Label – should you go ahead and get one?

 

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A CySEC license and the establishment of a brokerage in Cyprus is one of the most sought after regulatory environments to consider. Usually in line with our Start a Brokerage packages, one of the main questions we receive regarding licensing, relates to the requirements necessary to submit a CySEC license application for a CIF. Updated July 2022.

Depending on your structure, whether you are an already established brokerage, a forex IB or white label, a CySEC license is one of the most reputable forex licenses to have. Not only for the protection it provides to traders but also for your banking structures, for maintaining top organizational setups, for the EU passport and the possibilities it opens up for further development.

A full CySEC license is of course the way to go, but there may be more options to consider that allow for manageable operational costs and a viable future, always taking into consideration your current setup.

If you’re uncertain on what your next steps should be, make sure you contact us for a confidential discussion with a member of our team

For the past decade, allFX-Consult has been supporting small, medium and large brokerages through our Start a Brokerage packages enter the EU area the right way, many times by suggesting compromises (where necessary) to reach milestones that a brokerage can sustain towards the larger goal of obtaining a full CySEC license.

 

Cysec license – What is a Cyprus Investment Firm (CIF)?

 

• A registered, regulated and supervised firm, reporting in regular intervals to the Cyprus Securities and Exchange Commission (CySEC).
• CIFs must be licensed by the Cyprus Securities & Exchange Commission, which is the relevant regulatory and supervisory authority.
• A CySEC license application is necessary to be submitted, with the Investment and ancillary services the CIF is planning to provide (Please see below all services).

Find out which brokers are licensed in Cyprus today as well as the country’s latest economic data.

 

How do I get a CySEC License?

 

Once you decide that entering the EU market is your next step, you will need to appoint an application promoter for your CySEC License. You will discuss all options and decide on the type of license most suitable to your business model. The two main business models relate to either your brokerage being the middle-man (Straight Through Process to a Liquidity Provider – STP) or your brokerage “making the market” – MM – being itself the Liquidity Provider and deciding on the Risk accordingly). In either of the two models, a set of Investment and Ancillary Services will be requested from CySEC for authorization, accompanied by information on the company, its Directors and its UBO(s).

 

Following the decision making process above, here are the 4 major tasks you will undertake to get a CySEC License:

 

1. Internal assessment to verify the viability of the project (source of funds to be used as capital and people who will effectively direct the business).
2. Register and incorporate a new company for the purposes of the CIF. We will find and appoint the 2 Executive Directors (4 eyes) and the 2 Non-Executive Directors who will comprise your BoD.
3. Complete the application form, gather necessary documentation, submit application, respond to inquiries from the regulator and provide additional documentation if and when required.
4. Activate your license after authorization is granted. Setup office, hire key employees, finalize technology/equipment and pass the final CySEC inspection.

 

CySEC License – Investment Services

 

• Reception and transmission of orders in relation to one or more financial instruments;
• Execution of orders on behalf of investors/clients;
• Dealing in financial instruments on own account;
• Portfolio management;
• Investment advice;
• Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
• Placing of financial instruments without a firm commitment basis;
• Operation of Multilateral Trading Facility (MTF);
• Operation of Organized Trading Facility (OTF).

 

CySEC license – Non-Core – Ancillary Services

 

• Safekeeping and administration of financial instruments for the account of clients (includes custodianship and related services such as cash-collateral management);
• Granting credits or loans to an investor (to allow investors to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction);
• Advice to undertakings (relating to capital structure, industrial strategy and related matters and consulting, and services in relation to mergers and the purchase of undertakings);
• Foreign Exchange services (in cases when they are connected to investment services);
• Investment research and financial analysis (relating to transactions in financial instruments);
• Services relating to underwriting.

 

The CySEC license application requires the following documents:

 

• Completed application form as provided by CySEC (recent)
• Proof of existence and origin of funds to be used as capital
• Company legal documents (certificate of incorporation, Memorandum and Articles of Association)
• Certificates of the registered office in Cyprus
• Certificates by the Republic of Cyprus confirming the Directors & Secretary of the Company
• Information about the directors, managerial staff and shareholders with special participation (CVs, completed forms/questionnaires, academic qualifications, statements of honour)
• Clean criminal records and Certificates of Good Standing of the shareholders with special participation, the Board of Directors and employees of the Company
• Group structure (if applicable)
• Organizational structure
• Together with the above document bundle, a three year business plan, the internal procedures/operations manual (IPM or IOM) and anti-money-laundering (AML) and know-your-client (KYC) procedures must be filed with the application.
• Company policies bundle for best execution practices, conflicts of interest, governance.

**This is not an exhaustive list

 

Application fees for Investment Firms, payable to CySEC

 

The official document outlining CySEC’s fees can be found in the following link:

https://www.cysec.gov.cy/en-GB/cysec/fees/Investment-Firms-Fees/

Note (a): For faster application process, CySEC’s fast track scheme can be requested for an additional fee of Euro 25,000, payable to the regulator.

Note (b): The Investor Compensation Fund (ICF) is payable after license is granted and prior to its activation and its contribution starts from Euro 37,000 (including one (1) investment service and the ancillary service of safekeeping and administration.

Note (c): Promoter’s application fees are separate and not related to any of the above amounts.

 

Share Capital Requirements of a CySEC license

 

As of June 26 (2021), the new Regulations and Directives IFD/IFR came in effect, changing the Investment Firm categorization and Capital Requirements based on the size, type of activities of the IF and inter-connectedness with other market players. More information on IFD/IFR is analysed here.

Note: Initial share capital will be deposited and blocked in an EU bank until CySEC license is granted. After authorization, funds are released accordingly.

 

75,000 Euro (Cannot hold client funds):

• Reception & Transmission
• Execution of orders on behalf of clients
• Portfolio management
• Investment advice

 

150,000 Euro (Can hold client funds):

• Reception & Transmission
• Execution of orders on behalf of clients
• Portfolio management
• Investment advice

 

750,000 Euro:

• Dealing on own account (market maker)
• Provision of underwriting services in respect of issues of financial instruments

And any of the below:

• Reception & Transmission
• Execution of orders on behalf of clients
• Portfolio management
• Investment advice

 

Looking to obtain a Cyprus forex license? Contact us to look into the details

 

Employees of the CIF – Managerial positions require certificates (Basic/Advanced examination)

 

Employed before and during the application process

• 3 Resident Directors and 1 non-resident (if need be)

• • Two Executive Directors (4 eyes)
  • Two Non-Executive Directors

Employed after obtaining the license and prior to activation

• Money laundering, risk manager and compliance officer
• Head of each department

• •    Dealing Room
  •    Sales,
  •    Back Office
  •    Dealing on own account
  •    Accounting
• Internal and External Auditors (outsourced engagements)
• Legal Advisors

 

Costs to run and maintain a CySEC license

 

There are many offices that will sugar-coat the running costs of a CIF. Some will also help you in creating a low cost operation plan. Unfortunately, everyone’s come to realize that these plans have no future. We’ve seen small and large balance sheets, budgets making and breaking brokerages, new setups going on sale 6 months after authorization, new setups growing exponentially in a very short period of time.

A license promoter’s job is to get you through one door. allFX-Consult’s job is to get you through so many more. 

An investor targeting a CySEC license that correctly followed the process described above does not look for low operational costs. This is an investor that raised the proper capital required for the license, but also the capital to run the business with a 3-5 year feasible plan in place.

Let’s get you to that point by setting up a correct structure that within a targeted time frame can make this work

 

Initial/internal assessment

Before allFX-Consult and/or any of its associates takes on a project, an internal assessment is carried out to determine the validity/viability of an application. The background of the people that will effectively direct the business (primarily shareholders) as well as proof of existence and origin of funds to be used as capital, must be evaluated and assessed prior to any engagements.

Please note that this step is mandatory prior to accepting down payments or on-boarding a project.

 

Important Notes

The forex license acquisition of already approved licenses (CySEC and offshore) has become very popular in recent years. Although we don’t recommend this due to the costs associated with it (unlike applying for a new license or partnering as a White Label/Tied Agent), it is definitely a way to avoid bureaucratic delays, especially offshore. If you are looking to buy or sell a forex license, we almost always have a counterpart (buy side & sell side).

It’s important to consider that the above is for informational purposes only. The actual requirements will be thoroughly discussed with the application promoter that will handle your CySEC license. Our partners/associates have years of experience to guide you through the requirements.

There is no “guarantee”, no matter what people/companies tell you regarding the time frame to receive a license and/or a successful application outcome. The granting or rejecting of the application as well as the complexity of each application determines the outcome and the CySEC committee is the sole decision maker. allFX-Consult is trusted because of our diligent, fast, targeted approach and attention to detail.

CySEC is an independent public supervisory Authority currently supervising hundreds of entities. From Cyprus Investment Firms, Administrative Service Providers, the Cyprus Stock Exchange and issuers registered in foreign markets.

*information taken from a public document published on CySEC website at the time this article was written.

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How allFX-Consult can step into this picture:

allFX-Consult is a boutique forex consulting agency, catering to quality rather than quantity. For over a decade, our Directors have been connecting with some of the best individuals/professionals, service providers and brokers the industry has to offer, ensuring we can meet any corporate challenge relative to how to start a forex brokerage.

allFX-Consult has a counterpart/partner for any corporate structure. We’re chosen for being discreet, detail oriented and deadline driven.

Contact us for a private conversation to discuss any forex related topic through the contact form or one of our emails at info@allfx–consult.com, partners@allfx-consult.com. We specialise in training sales teams and forex corporate structures for individuals that want to Start a Forex Brokerage.

 

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Tied Agents | Definitions and detailed information