A brokerage regulated by a licensing authority is permitted to provide financial services while practicing strict measurement in relation to its financials, operations and clients’ protection. The legal ground for these strict measurements is the Market in Financial Instruments Directives (“MiFiD”), European legislation which was implemented into the Cypriot code more than five years ago, placing Cyprus in line with leading European financial jurisdictions such as the United Kingdom, Luxemburg and Germany.

When do you need a Forex brokerage license?

We strongly recommend reading the unofficial summary of CySec’s licensure guide and using a local, professional consultant to streamline and expedite the process of acquiring a license. Consultants are experts in the field of incorporation and licensing, and offer niche services tailored to your needs.

What do you need to do to obtain a CySec license for providing Forex brokerage services?

Eligibility

A company which is established in Cyprus and intends to provide (or perform) non-exempted financial services in relation to financial instruments in or outside Cyprus on a professional basis.

Application form

You can download a 28-page English document, where you’ll be asked to provide all information covering the relevant details in relation to the company, including owners and people that direct its business (http://www.cysec.gov.cy/licence_members_5_en.aspx).

Fees

Depending on the services that will be provided, fees can vary from 7,000 euros for a broker to 10,000 euros for market makers (i.e. someone who deals in its own account). Adding portfolio management, investment advice etc. will incur bigger fees (http://www.cysec.gov.cy/fees_en.aspx).

Submission

Applicants should submit the necessary paperwork in hard copy form at CySec’s offices in Nicosia; applications cannot be submitted electronically.

Conditions

The following are the major topics to be assessed by CySec with regard of the applicant:

  • Adequate initial capital
  • Suitable shareholders
  • Suitable persons who effectively direct the business
  • Suitable staff
  • No close links
  • Head offices in Cyprus
  • Member of the Investor Compensation Fund
  • Adequate organizational procedures

Authorization

CySec assesses the application that was submitted in a very short timeframe (few weeks) and typically reverts with clarification any necessary questions. Successful applications are then forwarded to CySec’s board which decides whether or not to grant the license. The decision has to be taken by CySec’s board within 6 months from the day the application was submitted in full (i.e. no clarification is needed).