We have seen many innocent investors fall victim to early stage brokers operating without a license, and had shut down their operations as they couldn’t pay up a client’s earnings. Whenever this happens, victimized customers do not have any avenue to seek compensation and express their grievances.
Now why do brokers need to attain a license? Here are 2 points:
- The Forex license is regulatory approved. If allowed to operate as a forex platform company, the approved forex company would be given a guideline to advertise their services. The dealer can operate their business openly, so long the company operate in compliance within the legal framework of a regulated forex broker.
- Banking and deposit collection. With a license, payment providers and banks are more willing to partner with you for a long term. There will be occasional requests where the bank would try to ensure your regulated entity abides by the AML and KYC ruling. So long your organization follows the guidelines, the entity continue to enjoy banking and merchant services
In summary, attaining a license not only help your organization gain credibility from your clients, attain public recognition, best of all, clients confidence, be it on fund safety or the regulator being their best channel of protection.
If you are considering attaining a license for your brokerage, contact us