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.
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.
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.
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.
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 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.
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.
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.
The company receives a license after successfully passing the previous stages.
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.
One of the important factors for clients who choose a Forex broker is the availability of an appropriate license — official permission from the financial regulator (or a special financial commission). A license provides a Forex broker with access to professional stock markets and gives the legal right to conduct trading operations. For traders and investors, a license is a guarantee of reliability and a good reputation of a broker.
If a Forex broker is planning to expand activities in the European Union, Cyprus is usually chosen for this purpose. It is one of the most suitable jurisdictions because it is possible to obtain the Cyprus Securities and Exchange Commission (CySEC) license there. It allows brokers to legally operate, take customer deposits, and perform other legal actions in the territory of any EU member state.
Forex licensing requires the applicant to comply with certain requirements and conditions and submit a set of documents. Business owners choose Vanuatu for obtaining such a license as the Financial Services Commission (VFSC) has established the most favorable conditions for licensing companies in this jurisdiction. The regulatory authority may grant a license of one of three classes, each of which provides business owners with certain privileges and advantages.
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