How to purchase a Forex License in 3 Steps

Many aspiring business people, faced with bureaucratic formalities, are frightened by the idea that obtaining a license takes a very long time, and to confirm the legality of their intentions, thick stacks of documents are required that must be collected through numerous government agencies. As a result, people spend a lot of money and nerves to open a Forex brokerage company. Therefore, a practical and cost-effective solution is to purchase a ready-made license and brokerage company, which will help significantly reduce any associated costs. Below, we will consider the main criteria for Forex license acquisition and the parameters for choosing a suitable field of activity.

Our company provides highly qualified specialized assistance in buying and selling businesses, providing fully-covering research and assessment. We have many profitable offers for Forex licenses in India, China, Singapore and other countries of the world.

Forex Licensing: Jurisdiction Selection, Research and Market Assessment

The turnkey Forex broker solution is a comprehensive solution that will allow you to launch a brokerage business with a package of all necessary services for the most demanding clients, with multi-layer liquidity, a universal trading platform and a convenient back office. It must be borne in mind that trading on the stock exchange is carried out not by ordinary individuals, but by professional market participants.

Brokers provide the opportunity to their clients – individuals and legal entities – to open trading accounts and submit orders for purchase/sale, which allows them to make a profit when the quote rate changes. The sooner you can get a license, the sooner you will start making money from your business. This is why the option of a ready-made Forex company is the most effective.

The first step in getting a Forex license to buy is choosing a jurisdiction. There is no single centralized regulatory body in the Forex market. The foreign exchange market cannot have one common regulator, since the operations are independent, and the providers of these operations do not interact with each other. However, the activities of some participants in the Forex market are still regulated, for example, brokers.

Depending on the region, regulatory compliance norms and conditions for registering and transferring an existing business may vary, including the time required to overview the application, as well as legal and financial aspects.

To understand which regulator to apply for a license, the broker needs to take into account several important factors:

• what budget the company is willing to allocate for obtaining a license;
• banks in which the company intends to open accounts;
• region in which the company will operate;
• how long the company is willing to wait for a response to a request for a license.

Answering these questions before Forex license purchase will make choosing a regulator much easier for you.

1. Prime A-category. This category includes regulation of the Forex market in the USA and Switzerland. In the United States, the Forex market is controlled by the CFTC regulatory authorities and the National Futures Association, and in Switzerland by FINMA.
2. Category-B – universal market-spaces. It’s for example Britain and Australia.
3. Commonly-chosen jurisdictions of С-category. Level C includes regulators of Forex brokers in Cyprus, New Zealand and Malta. In Cyprus, the official regulator is the Securities and Exchange Commission (CySEC), in New Zealand – the Financial Markets Authority, and in Malta – the Malta Financial Services Authority (MFSA). Formally, these regulators provide a certain level of protection to brokerage clients.
4. Offshore of D-category. This means that financial legislation there is quite weak in development, taxes are low, or large tax breaks are applied.

General Preparations, Documentation and Application Process

Technology is at the core of any Forex-business. In this regard, an entire industry has even emerged offering trading technologies and platforms for brokers and other financial companies involved in trading. The Forex market has begun to develop rapidly, which requires the ability to instantly integrate into it, demonstrating flexibility and at the same time reliability. The acquisition of the Forex license sell option includes the following steps.

1. Contact the specialists of our company for consultation and further cooperation. We will conduct a comparative market analysis for you and help you choose the most suitable jurisdiction, taking into account your intentions, conditions, budget and plans.
2. Filling out the application.
   

   

3. Paperwork initiation bearing in mind specific documentation requirements: here you may need personal data of the applicant or applicants, confirmation of the availability and origin of funds, confirmation of the absence of violations of the law and any other claims, etc. The seller may request any other documents at its discretion.
4. Applicant overview and approval.
5. Final paperwork and conclusion of the transaction.
6. Forex license transfer to a new owner.

By deciding to purchase a ready-made option, you can avoid many unnecessary and troublesome nuances, which we will discuss later. Regulators are responsible for issuing Forex dealer licenses. They can be either local organizations or international commissions. They don’t just roverview candidates and make a verdict – their work covers a wider range of actions:

• thorough multi-stage verification of the applicant;
• monitoring its operation after licensing;
• revocation of permission if violations are identified.

As an FX broker, you must adhere to a wide range of Forex industry regulations specified in your license. Therefore, obtaining a Forex broker license should be your top priority. Brokers who have managed to obtain this type of brokerage license are required to unconditionally comply with the principles and rules of the regulatory body and comply with the rules of the exchange. Violation of the rules is punishable by fines or confiscation of the license, up to and including cancellation of the account on the exchange. A ready and functioning company will guarantee that no violations have occurred.

You should also remember that obtaining a Forex trading license may require a large amount of capital, which may not be available to most new brokers. First of all, the Forex broker must make a contribution to the compensation fund, which will be used in the event of loss of solvency of one of the licensed market participants. As part of the installation of a turnkey Forex broker solution, we can provide comprehensive assistance, including advice on obtaining a Forex broker license.

Future Compliance and Support

After the transaction is concluded and the Forex company becomes the property of the investor, the new owner will need to adhere to the parameters listed below.

1. Compliance with liquidity and capital standards: brokers are required to maintain sufficient levels of liquidity and capital in accordance with regulatory requirements.
2. Customer liability insurance: This type of insurance is important for liability to customers in case of possible losses.
3. Illegal monetary means circulation prevention and anti-terrorism financing compliance: brokers are required to comply with illegal monetary means circulation prevention and anti-terrorism financing normative points.
4. Compliance with transparency and reporting: regulators and clients must receive a concrete and clean reflection of their activities.
5. Compliance with security standards: brokers must ensure the security of client funds and information in accordance with established standards.

Purchasing a license without professional help is not easy with any regulator. Therefore, it is recommended to enlist the support of experienced legal specialists who will help you correctly apply for a license, draw up documents in accordance with the requirements of the legislation of a particular country, and will monitor and adjust the entire process.

Our company offers comprehensive legal and compliance support, and advisory and practical assistance in obtaining and purchasing this type of permit. We work with any jurisdiction. There are no difficulties or obstacles for us. Contact us right now.

Article’s author is Denys Chernyshov – founder and CEO of the globally-famous organization Eternity Law International.