Specificity of the registering
Having obtained a Forex license in Cyprus, your company will be able to provide a full range of brokerage services. One of the main requirements for a Forex broker is the development of a business plan and a clear organizational structure of the company, as well as the preparation of the company’s policies and procedures regarding AML/CTF.
To obtain a Forex license, you need: an excellent business reputation of shareholders, directors, beneficiaries, employees; an understandable origin of the share capital; the presence of appropriate experience among directors and employees; a modern and secure IT infrastructure; a well-thought-out and reasonable financial plan for the next 5 years; well-developed risk management procedures, AML, CTF.
Since the end of 2008, Forex and other investment activities have been under the control of the Cyprus state Commission — The Cyprus Securities and Exchange Commission, which in the form of an abbreviation sounds like the CySEC commission. CySEC monitors Forex brokers through reports on capital adequacy, financial compliance of the customer company and professional aptitude of specialists.
The licensed company undertakes to keep the share capital at a level not lower than the minimum. At the same time, the company’s capital can be invested in low-risk assets. They are determined by the CySEC Commission.
The company’s capital depends on the type and number of services provided that it wants to register, but it always has a minimum fixed threshold. The capital of 80000 EUR allows providing investment advice, receiving and transmitting trading client orders. The capital of 125000 EUR includes the above services, as well as the management of investment portfolios, STP. 730000 EUR of capital is added to the previous exchange operations and underwriting.
The organizational structure of a Forex broker in Cyprus includes: general director; a board of two managing directors; at least two certified traders; secretary; CTO; CFO; CRO; MLRO; internal auditor; compliance officer; head of the brokerage department. Other functions can be outsourced.
One of the members of the Board of Directors must be a resident of Cyprus. The reputation of the director and his professional skills play a significant role in issuing a license. They concern not only the financial sphere.
Term of registering
On average, the period for obtaining a license is about 6 months. There were cases when they were received for 4 months, and sometimes the process of receiving stretched for 18 months. A lot depends on the involvement and willingness of the Client. For a preliminary analysis of your case and to receive comments on the time and cost, please contact our specialists.
Benefits of license
Why the island of Cyprus, you may ask? Because a number of indisputable advantages are concentrated here:
In 2004, the independent Republic of Cyprus joined the EU — and this determined its future fate: the legislation of the state is developing in such a way as to be one with the legislation of the European community;
Having passed the authorization in CySEC, the company gets the right to conduct its activities on the territory of the entire European Union, as well as in Norway, Iceland and Liechtenstein;
Drawing a parallel with the rest of the EU countries, it can be noted that when obtaining a brokerage license, the state puts forward clear and transparent requirements;
A clear system of control over licensed forex companies is prescribed here. The state also has the right to regulate their activities;
The regulatory framework of the island’s Securities and Exchange Commission is constantly being developed and supplemented;
The issuance of brokerage and investment licenses has been carried out in Cyprus for decades, which indicates many years of experience;
CySEC consists of qualified, specially trained employees.
The cost of obtaining depends on many introductory documents, as a rule, it starts from 25,000 Euros. To receive a detailed commercial offer for obtaining a license in Cyprus, please contact our specialists.
Specificity of the registering
The Cyprus Investment Services and Activities and Regulated Markets Law of 2007, CySEC Directives No. 144-2007-03, No. 144-2007-04, official notification of CySEC dated 17.06.2009 and 06.11.2009 on the licensing of Forex activities, The Markets in Financial Instruments Directive (MiFID). On the territory of the Republic of Cyprus, the MiFID directive was implemented by the Law of 01.11.2007 that came into force.
Having obtained a Cyprus Forex license, a licensed company has the legal right to conduct its activities in any of the EU countries. To do this, she needs to go through the certification procedure, which is usually quick and simple.
If you plan to work outside the EU, but at the same time in Europe, it is enough to notify the CySEC commission about this. In this case, it is necessary to specify the country in which the activity will unfold, the actual type of this activity, and describe the organizational structure of the company. The CySEC Commission transmits the information received to the country in which the company wants to develop, and that, in turn, gives the “green light”. During the last stage, no additional checks are needed.
Every Forex company must have an office (a nominal office is not suitable) operating on the territory of Cyprus. The law does not prohibit conducting activities from abroad, but the basic functions must be performed at the place of registration-directly on the island.
Approximate financial expenses, which include the rent of a working space, purchase and maintenance of computer equipment, telecommunications, salaries of key employees and audit services, taxes start from 15,000 EUR per month.
Once a month, the investment company undertakes to submit capital adequacy reports, once a year — to conduct internal and external financial audits, prepare a report on the compliance of the Corporate Investment Fund with CySEC requirements, prepare a report on risk management and other financial issues. The investment company also undertakes to open an account with one of the local banks.
Brokers of the company are required to provide a certificate confirming their competence and qualifications. It is worth noting that at the initial stage, some positions may be occupied by the same specialist.
What is included in our list of services for obtaining a Forex license in Cyprus
Analysis of the business plan and development of the necessary structure;
Adjustment of the business plan in accordance with the requirements of CySEC;
Development of the company’s charter and registration of a legal entity;
Opening an account;
Opening of segregated client accounts;
Assistance in selecting an office and local directors;
Preparation of AML / CTF procedures;
Preparing Risk management procedures;
Preparation of InfoSec procedures;
Preparation and submission of a license application;
Support during the application review process and communication with CySEC;
This is only a small part of what we can help you with. For more information, please contact our specialists.
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