The regulatory body responsible for forex regulation and the issuing of forex licenses and monitoring of activity is the Financial Conduct Authority (FCA). The UK regulator was established to provide a regulatory framework for all financial companies including UK forex licences from rule making and investigatory practices, to powers of enforcement and ensuring statutory conditions are met. The FCA's scope regulates exchanges, financial companies and financial services markets.
A firm may provide forex broker services as long as it possesses the relevant permission issued by the Financial Conduct Authority (FCA). The FCA regulates any person or legal entity who carries out regulated activity in the UK. The Financial Services and Markets Act 2000 (FSMA) provides the legal framework used to establishe rules and regulations for financial services firm's licensing in the United Kingdom. It has been amended with the implementation of the MiFID within the European Union. Once authorised, a person can run the permitted activities in European Union member states, but needs to apply for a regulatory passport to establish a branch/representative office or provide cross-border services.
There are three categories relevant to forex broker services in the UK:
1) Dealer Licence – a full licence equivalent to "Market Making" or having the option to run a B-Book as the client’s counterparty;
2) Intermediary Licence – a "Matched Principle" licence limiting a broker’s activities to Straight-Through-Processing (STP) of orders in the case of an Agency or A-Book model; and,
3) Restricted Broker Licence - an introducer-type of licence allowing sales and marketing but not authorized to hold client funds.
A Dealer or Intermediary licence would allow a firm to offer Contracts for Difference (CFDs) in forex, commodities, futures and shares to retail and wholesale clients. Whereas, a Restricted licence would allow a firm to introduce clients to a Dealer or Intermediary firm.
The minimum capital requirement for a Dealer Licence, essentially a ‘market maker’, is EUR 730,000. An Intermediary Licence (i.e. Matched Principle) is EUR 125,000. For a Restricted Broker Licence, the minimum capital adequacy is EUR 50,000.
It is essential to demonstrate "mind and control" from within the UK; and, therefore, a physical presence and people are required. You must also designate a Compliance Officer and a Chief Executive Officer who must be located in the UK, and each must pass fit and proper tests and be approved persons by the regulator.
Depending on the size of the firm, sales, technical, compliance and acconting staff may also be required.
The experience and qualifications of 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.
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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
- Capital adequecy requirements must be calcuated daily
- Annually, an audited financial statement
- Monthly, interim financial statements prepared in accordance with generally accepted accounting principles
- As needed, any material changes to the firm, its operations or people
London is home to some of the world's largest financial institutions and there are a number of banks serving the financial services sector. We will facilitate bank introductions and account openings.
The UK is the center of the financial world and hosts many of the participants in the financial service industry. We will facilitate and 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
4 to 6 months.
If you want to talk to us now, call +1 415 528 2002 or email firstname.lastname@example.org.
Level 10, 21 Queen Street, Auckland, New Zealand
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