The Bahamas Forex Licence

---

A forex broker is the equivalent of “Dealing in Securities” under SCB regulations, also referred to as a “Broker/Dealer”.  Specifically, a Registered Firm would receive authorization to carry on Dealing in Securities.

There are two categories of Broker/Dealers: 

1) Dealing as Agent and Principal – equivalent to Market Making or having the option to run a B-Book as the client’s counterparty; and, 

2) Dealing as Agent Only – limiting a broker’s activities to Straight-Through-Processing of orders in the case of an Agency or A-Book model.

In addition to the Broker/Dealer licence, if Contracts for Difference (CFDs) are offered, a CFD authorization is required.  Essentially this would allow the forex broker to offer Contracts for Difference (CFDs) in forex, commodities, futures and shares to retail and wholesale clients.

The minimum capital requirement for Dealing as Agent and Principal, essentially a ‘market maker’, is USD 300,000.  If Dealing as Agent Only, then the capital requirement is USD 120,000.

If engaging in the business of dealing or arranging deals, you must have a physical presence in The Bahamas.  You must also designate a Compliance Officer and a Chief Executive Officer who must be located in The Bahamas.  Each must pass fit and proper tests and be approved persons by the regulator.  

The experience and qualifications of the personnel constitute one of the most important elements of a successful application.  It is very important to be able to locate and select qualified individuals, who would constitute the minimum required key personnel of your firm.  And, these individuals must be approved by the regulator.

We can handle all relevant subjects which include selection of the personnel, immigration and work permits, drafting employment contracts and, most importantly, check adequacy of the candidates against the key position in your firm.  

The regulator requires you to disclose most all aspects and details of your business. Our business is to ensure you meet the regulator's requirements, and we will review what you currently have or complete what is needed for you.

- Business and Financial Plan

- Supervisory and AML/CTF Manuals

- KYC of beneficial owners, directors, controllers and affiliates

- Proof of Professional Indemnity Insurance

- Annually, an audited financial statement

- Quarterly, interim financial statements prepared in accordance with IFRS accounting principles

- As needed, any material changes to the firm, its operations or people

The Bahamas has a number of options to choose from banks serving the financial services sector.  We will facilitate bank introductions and account openings. 

The Bahamas reputation as a sound jurisdiction is widespread and the country has close ties with the US, UK and Europe.  Establishing institutional relationships with liquidity providers and prime brokers not so difficult, because The Bahamas is recognized throughout the world.  We will help you establish the institutional relationships you need to build a successful business.

When you engage with us, our scope of service covers all of the aspects you need in order to get your forex broker licence:

- Provision of regulatory guidance

- Company incorporation

- Approved Person’s fit and proper tests

- Employing local directors, officers and staff

- Establishing an office

- Facilitating bank accounts

- Introduction to accountant and auditor relationships

- Management and supervision of the application

- Preparation of all client-facing legal documents including client business terms and disclosures

- Completing the business plan, compliance manuals, employment and outsourcing agreements

2 to 3 months.