Forex Broker Licence in Malta

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.

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Company registration in Malta

It is necessary to register a local company, for which a license will subsequently be issued. You should select the name of the company, indicate the participants and provide their documents in order to register a company.

Account opening

The company needs to open a bank account in order to deposit the share capital. Opening an account is a complex process that should be entrusted to professionals. In order to open an account, you should to collect a package of documents and competently conduct further negotiations.

Contribution of authorized capital

The exact amount of authorized capital depends on the type of the license. The beneficiary must provide documents on the source of origin of funds contributed as authorized capital upon bank's request.

Hiring required employees

The company must have key positions employees, some of them must be local. We will help with the search and selection of employees.

Office rent

Office rent is not mandatory, but having one will significantly increase your chances of obtaining a license. We will select a budget option that meets the requirements.

Preparation of documents for applying for a license

It is necessary to prepare a business plan, and policies. In addition, application forms must be filled out. The client will only need to provide a basic information, on the basis of which we will prepare documents, taking into account local legislation.

Filing an application

It is necessary to submit an application to the regulator after preparing the company and documents. After submitting an application, you must be ready to answer additional questions from the regulator. We will take care of timely and competent answers.

Obtaining a license

The company receives a license after successfully passing the previous stages.

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Advantages of a Malta license

Malta is a prospective international financial center with a good reputation. Interest in MFSA licenses is caused by some objective factors:

  • The Republic of Malta is a country with a stable political system, a high level of the economy, and a loyal tax environment.
  • The country has a tax law compatible with the EU.
  • Thanks to the passport system, the Malta forex license allows you to provide services all over the EU.

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:

  • Accepting and transmitting client orders;
  • Executing orders on behalf of clients;
  • Trading from their accounts;
  • Placing of financial instruments;
  • Keeping and managing investors' (depositors') capital, including acting as trust managers.

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.

Requirements to licensees

Malta follows the standard pan-European licensing regulations. The applicant is required to:

  • Open a physical office in the country.
  • Contribute share capital to the local bank account. The minimum amount of the contribution depends on the category of Malta forex license chosen and the financial instruments to be used. When obtaining Malta licenses of II and III categories (Market Maker), which allow you to trade from your accounts, you must have a capital of at least 730 thousand euros.
  • Hire qualified employees with appropriate financial training — a director, accountant, risk managers, analysts, traders, and AML specialists.

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 procedure for obtaining a Malta forex license

The licensee must go through several stages:

  1. Preparatory stage. Company registration in the local jurisdiction. Preparation of documents. Submission of the application to MFSA.
  2. Pre-licensing stage. Issuing in-principle approval for a license. Creation of the corporate mechanism. Submission of supporting documents.

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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