Forex License In Cyprus
Forex License In Cyprus
The Forex business running within the foreign exchange market of global scale or business on binary auctions in Cyprus requires being an investment company (CIF). All issues related to its creation and requirements set will help the consultants of the Private Financial Services. Cyprus is ideal for those who chooses Forex to do business.
The list of services below complies with the Law 144(I) and may be delivered by companies with the CIF status. They are mentioned in laws responsible to regulate operations and services of the investment group. The Commission Cyprus supervises firms and has the required authorizations on the foreign exchange market (CySEC) and on the securities market.
Among main services, the following may be highlighted:
- The receipt and transmission of instructions through one or a group of financial instruments;
- Implementation of instructions from customers;
- Account operations;
- Portfolio operations management;
- Advice in investment matters;
- Warranty representation;
- Placement of financial instruments with fixed commitments or without them;
- Conducting operating activities.
In addition, further options (one or several) may be chosen for more effective implementation of company plans within the Forex market in Cyprus as follow:
- Management of the customer financial instruments is performed in favor and on behalf of the customer;
- Storage of values in banks, including management of gold reserves;
- Transfer of loans to investors in transactions where the creditor acts as the participant;
- Consulting on the list of issues of different nature – purchase of obligations, capital structure, strategy for production, etc.;
- Investment operations in the foreign exchange market;
- Financial analysis of investments and transactions with recommendations thereon;
- Services for client obligations, etc.
Companies may use various financial instruments. The following are sought-after:
- Securities in circulation;
- Options and futures;
- Financial instruments in the money market;
- Central Bank party in respect of commitments by statutory funds;
- Forwards and other instruments of industrial nature related to financial indices, interest rates, financial calculations and so on;
- Contracts on commodities and commodity resources with calculations in cash or as physical calculations in operation within multilateral trading platforms;
- Forwards and CB derivatives in respect of contracts on commodities and commodity resources held as physical settlement, unless otherwise specified in the clause 6 above;
- Cash settlement contracts;
- Forward contracts, futures and options on interest rates and other tools of industrial character, in relation to climatic aspects, freight rates, emission quotas, conducted with cash, and so on.
Permits issued for CySEC business operations provides for the following aspects:
- Administrative structure of the candidate and peculiar organizational adequacy;
- Mechanism efficiency and regularity for internal audit;
- Separation of assets of the customer and the candidate with concurrent separation of customer assets among in-between;
- The mechanism efficiency and its adequacy regarding prevention of conflicts of interest and related solutions;
- The required staff for each candidate.
Main Parameters - Forex License in Cyprus
The list of parameters to comply with to obtain the status of CIF as shown below.
Capital and requirements thereto
Delivery of services of investment pattern as specified above in clauses 1, 2, 4 and 5 requires the company to pay the sum of the initial capital in the amount of 200,000 dollars and more. The activity referred to in clauses 3, 6, 7 and 8 requires an initial capital in the amount of over $ 1 million USD. A candidate should also evidence the availability of assets required to form such capital as well as its consent to freeze these assets for financial settlements, provided that this is required by the SEC Commission.
Requirements of organisation nature. Investment company based in Cyprus should:
- Create, implement and enable procedures for decision making and organizational structure that determine the direction to report with the con-current distribution of responsibilities and functions. Mechanisms should be also strengthened aimed for internal audit to ensure compliance with all decisions taken by the CIF company;
- Form and enable the risk management policy and procedures able to identify risks aimed for CIF systems, operations and process where it is appropriate with formation of CIF acceptable risks;
- Maintain and use measures of administrative and organizational measures that will eliminate conflicts of interest due to draw-back towards the client’s interests;
- Use a range of required measures for continuous process of investment and other services implementing the required systems, procedures and resources;
- Use the proper procedure for client identification, maintenance of document database and internal documentation;
- Introduce and use the independent function of stable efficient compliance in view of the legislative framework. An authorized person is required to perform internal control who is responsible for control and accountable to the CIF Department for at least once every 12 months;
- Establish and use accounting procedures and principles that allow submission of reports to the CySEC Commission under regular terms.
Functions to be delegated. Contracting requires the following instructions:
- Personnel Control;
- Risk Management and Internal Control;
- Internal Auditing.
Based on the candidate’s preferences:
- Audit Committee;
- Investment Committee;
- Risk Control Committee.
CIF Company and its head office. The office needs to be based on the territory of Cyprus, and when it is established, the following requirements are to be met:
- The Board of Directors should include at least 2 Executive Directors. One of them should be a resident of Cyprus;
- Non-Executive Directors should be 3 in number, at least 2 of them should be of Cypriot citizenship;
- Head of Investment Service Departments are full time employed;
- Functions stated above are executed.
This is the minimum range of requirements binding to meet. Nevertheless, CySEC evaluates candidates individually in view of a range of factors both significant and of non-significant nature.
- Organization chart indicating departments and their key personnel;
- Internal regulations established for CIF as specified and used;
- Business plan with the binding analytical component of the company, its development, range of services, anticipated CIF activity markets, hit list data, options for staff and corporate promotion;
- Individual Questionnaires;
- Major agreements regulating CIF operation.
The Charter of the company and its founding agreement
Such documents are to indicate that the company runs under CIF jurisdiction. in Cyprus, investment companies operate based on the current legislation, providing their services with reference to relevant laws.
Application for Forex License in Cyprus
The length of application preparation to CySEC takes about 2-3 months. This period directly depends on the timeliness when customers submit the required documentation and feedback. As per the law, the deadline for the CySEC decision concerning the decision prepared accordingly should not exceed six months since the date of its submission. The cost of this service is fixed at the rate of $ 3,000 USD that is complemented by the fee for each of investment services referred to in the petition; such fee may vary. Each service requested in addition shall be paid additionally at the rate of $ 500 for each of them.
Binary Options and Related Licenses
In compliance with CySEC regulation, binary options are the specified services delivered on the global Forex market. When filing a petition in respect of 4-7 instruments, binary options should be also included. As a consequence, there is no special regime for licensing in this direction that differs from the standard procedure. We offer a rate for arrangement of a Forex trading company with its subsequent licensing amounting to 30,000 Euros and that amount should also include the client expenses of 0.6% to issue the subscritipn share capital (the required guarantee is the required minimum).