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