The proof of the legality of the brokerage firm engaged in securities transactions on behalf and/or at the expense of the client is the license. Investors and traders give preference to licensed financial intermediaries as they realize that there is no sense to count on any legal recourse if a conflict of interest situation arises with an illegitimate broker.
Legal systems and rules of registration of licenses for financial activity differ in every jurisdiction. In Malta, which is an EU member since 2004, the Financial Services Authority acts as a financial regulator. The MFSA (The Malta Financial Services Authority) accepts applications for Malta forex license from candidates from various countries. For obtaining a license, foreign firms must first open a company (or a subsidiary) with a real office in the territory of the Republic.
How To
Malta is a prospective international financial center with a good reputation. Interest in MFSA licenses is caused by some objective factors:
MFSA regulates various financial funds and issues licenses of different categories. Depending on the type of license, a broker can provide a different range of services, including:
The most popular Malta forex licenses are of the II category, which allows the broker to act as a risk-free principal (consulting services + execution of transactions), and of the III category, which gives the right to manage investors' money at their discretion.
Malta follows the standard pan-European licensing regulations. The applicant is required to:
After receiving the license, the brokerage company must comply with all the requirements established by the EU directives and submit regular financial reports (monthly, quarterly, and annual).
The licensee must go through several stages:
The financial regulator examines documents for one to two months. The decision to issue a license is made within two to three months. In general, the licensing procedure takes from six months to a year.
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