If you want to be taken seriously as a Forex broker and establish your own firm, getting a Forex license is a must.
Let’s examine the best places to get a forex broker license in 2023!
Cyprus
The island of Cyprus is a viable option because of its long history of giving investment and brokerage licenses and its reputation as a premier location for Forex operations. Cyprus satisfies the requirements of the EU Markets in Financial Instruments Directive as a fully-fledged member state. Once the firm has been approved by the Cyprus Securities and Exchange Commission, it will be able to do business in every other EU country, plus Iceland, Norway, and Liechtenstein. (MiFID governs the process through which brokerages in the Eurozone get their required certifications).
Most importantly:
- business strategy, anti-money-laundering, and know-your-customer practices, and overall firm structure;
- a local bank account;
- Reports on capital sufficiency, internal and external audits, CIF compliance with CySEC standards, risk management, and financial statements must be delivered annually.
- minimum number of necessary managers and workers, their credentials, professional experience, strong reputation, etc.;
- local office.
The company’s minimum authorized capital shall not be lower than, depending on the nature and scope of the services provided:
80,000 Euros (for receiving and relaying trading instructions from customers and financial advice);
An STP license costs an additional EUR 125,000 and allows for the following services: the receipt and transmission of client trading instructions; investment advice; the execution of client trading instructions; the administration of client investment portfolios; and
EUR 730,000 (installation of trading activities on the stock exchange, market maker) (implementation of trade operations on the stock exchange, market maker).
Timeframe estimates place it between six and fourteen months.
Malta
The EU certification Directive states that those who get a brokerage license in Malta are then allowed to operate elsewhere in the European Union.
A brokerage firm in Malta needs an authorized capital of at least €500,000 (the minimum required for incorporation in a Maltese bank), a Maltese physical location, and licensed brokers in order to legally operate. Licensed businesses must provide periodic financial reports.
The company’s minimum share capital is required to be at least, depending on the kind of license.
Licensed in Category 2 at EUR 125,000 for STP (brokers send orders directly from their clients to liquidity providers that are international banks with open access to the real market traders, as well as for market prices).
With a Category 3 license and 730,000 euros, a broker may act as a market maker, decide on pricing for his customers, handle their money as he sees fit, and work directly with them (dealing on his own account).
Five to seven months is a ballpark estimate.
The United Kingdom
UK’s Financial Conduct Authority (FCA) broker license is well regarded internationally.
The business must have local directors in the United Kingdom with extensive experience in finance and investing.
For those in the UK looking for a forex broker, your options fall into one of three groups:
- Dealer LicenseÂ
- Intermediary LicenseÂ
- Restricted Broker License
Offering CFDs on foreign exchange, commodities, futures, and stocks to retail and wholesale customers require a Dealer or Intermediary license. A restricted license, on the other hand, will enable you to refer customers to a Dealer or Intermediary company.
Preliminary funding needs:
- An authorized dealer license costs 730,000 Euros.
- The fee for an intermediary license is 125,000 Euros.
- The fee to get a restricted broker’s license in Europe is 50,000 Euros.
Estimated duration: a year.
Do you want help in obtaining a brokerage license or a Curacao gaming license? Then contact Fintech Harbor Consulting.
