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Grentone Meta Solutions offer brokerage license solutions for both startups and for growing forex brokers. Improving your regulatory framework is crucial to building a strong market reputation. As your business expands, being prepared for higher compliance costs is essential. Here are some popular choices for jurisdictional Forex and CFD licenses that growth-stage brokers seek our expertise for:
- Cyprus Securities and Exchange Commission (CySEC)
- Financial Conduct Authority (FCA) in the UK
- Australian Securities and Investments Commission (ASIC)
- Financial Services Commission (FSC) in Mauritius
- Seychelles Financial Services Authority (FSA)
Investing in a robust regulatory regime not only enhances credibility but also attracts more clients, fostering long-term success in the competitive broker dealer industry.
- LABUAN (Malaysia) Money Broker License
- Vanuatu Securities Dealer License
- Seychelles Investment Dealer License
- St Lucia Forex CFD Broker Company
- Company Buyout
Grentone Meta Solutions offers comprehensive support for financial licenses, simplifying the process of applying for a Labuan Forex Money Broking license. Here’s how we assist you:
Our Services
- Promotion to Regulators: Advocate for your application with Labuan regulators.
- Application Assistance: Address all questions about the application process and requirements.
- Document Preparation: Draft and review all necessary application documents and questionnaires.
- Follow-Up: Ensure submission of additional information required by Labuan departments.
Permissions
The licensee can:
- Facilitate transactions by bringing counterparties together on mutually acceptable terms in the money or forex market.
- Receive payments through brokerage or commission fees.
- Act as a mediator, but not as a principal. (Note: Principals deal for their own account and take on their own risk, which is restricted by the guidelines)
Capital Requirement
Minimum Paid-Up Capital: MYR 500,000 (or equivalent), unimpaired by losses, with a certificate from banks within Malaysia and Labuan.
Physical Presence
Operational Office: Must maintain an operational office in Labuan, equipped appropriately for business purposes.
Business Plan
- Understand your business activities and goals to draft a compliant business plan.
- Advise on potential questions from regulators.
Other Information
- Approved Activities: Transact business in foreign currency only, not in Ringgit except for administrative and statutory expenses.
- Business Restrictions: Cannot deal with residents other than authorized dealers approved by the Central Bank of Malaysia.
- Auditor: Must appoint a Labuan Approved Auditor for accounts.
- Information Renewal: Notify Labuan FSA of any changes in constituent documents.
Due Diligence
Necessary to verify client identities. Required documents include:
- Certified photo page of passport for each director and shareholder.
- Certified proof of address (issued within the last 3 months) for each director and shareholder.
- Curriculum Vitae (CV).
- Business Plan.
- Financial Forecast.
- Organization Chart.
- Constitution documents for company directors or shareholders, and above details for each director and shareholder.
- Additional supporting documents as needed.
For companies listed on a major stock exchange or under equivalent AML regulation, evidence of listing or regulation suffices in place of the above information. Employees of such companies need a certified passport copy and employment confirmation.
Regulator
Labuan FSA is the statutory body overseeing the Labuan International Business and Financial Centre (Labuan IBFC), with objectives to:
- Promote and develop Labuan as a business and financial services hub.
- Establish national policies for the development and administration of international business and financial services in Labuan.
- Act as the central regulatory, supervisory, and enforcement authority.
Labuan FSA licenses and regulates entities in Labuan IBFC, ensuring compliance with both internal and international standards. It also formulates policies for business and financial services conduct in Labuan IBFC. We provide end-to-end support for the license application. Reach us to learn more about Labuan company registration and their license application.
To proceed, you need to incorporate a Vanuatu International company which will be the Applicant.
Once the License is issued, you will need to incorporate a local company which will be wholly owned by the Licensee company for the purposes of applying for local physical presence, bank accounts for local expenses, to employ and submit application for a Foreign Directors etc, Work and Residency permits to manage the company’s business activities from Vanuatu etc.
Below are requirements for an international company and Financial Dealer License Application.
1) Incorporation of Company.
Please see requirements below for the company incorporation. For incorporated Vanuatu International Company you need to provide the following to the regulator:-
– Certificate of Incorporation,
– Constitution,
– Provision of Registered Agent and Register Office for 1 year to the next anniversary date of incorporation,
– Register of Director,
– Register of Shareholder,
– Share Certificate,
– Certificate of Incumbency,
– Common Seal.
To proceed, you need to provide the following for the Ultimate Beneficial Owner (UBO) of company.
1. Copy of a Notarised updated coloured Passport;
2. Notarised Police Clearance for not more than 6 months;
3. Documented proof of Residency Address (can be in the form of a Utility bill);
4. Source of funds (can be in the form of a recent personal bank statement of the principals); and
5. Records of convictions/charges against the Beneficial Owner(s) if any.
For Shareholders and Directors, if they are different, item 1 and 3 will suffice. Complete a KYC form we will attach to you, and return in email with the above.
The company can be incorporated within 10 days and finalised within two weeks after receipt of payment (typical timeline, however not guaranteed).
2) Application for Financial Dealer License
Once the company is incorporated, we will proceed with the Financial Dealers License application.
There are 4 classes of Licenses. Reach us for the information.
Our Fee is to assist you with the Application for One Class of License. For each additional class of License, there will be additional charges.
The following fees (not including secreterial agent fees) will apply for just one class of license:-
FDL Principal Licenses Application fees (as of 26th July 2024): US$ 500.00 (Paid to the Government)
FDL Representative License Application fee (as of 26th July 2024): US$ 500.00 (Paid to the Government)
FDL Principal Licenses Annual fees (as of 26th July 2024): US$1,000.00 (Paid to the Government)
FDL Representative License Annual fees (as of 26th July 2024): US$1,000.00. (Paid to the Government)
This US$3,000.00 fee is paid directly to the Regulator.
Our scope of work is to review all documentations to ensure they comply with the requirements as best as we can ascertain, to maximise our prospect of approval prior to submission of the application.
We will liaise with the Regulator during the Due Diligence process up until a final decision is made. This scope of work covers for the first 3 months from the date of submission of the application with the Regulator. No additional fees will be charged for our time during this 3 month period. After that should the application be still under process, we will charge our time spent in continuing to liaise with the Regulator until a final decision so made.
The time frame for the application to be processed will depend on how complete the application is. This can be anywhere from 6 months to 12 months and possibly longer.
Once the application is approved in principle, the applicant must sent a security deposit of VT5,000,000 to the Government prior to the release of the Licenses.
This VT5,000,000 deposit is equivalent roughly to US$48,000.00. We will inform you the correct amount and Regulator’s bank account details to send to upon the need to facilitate the information.
This Security Deposit is refundable when the company ceases business, subject to no claims from clients. As part of the application, you will need to establish a local office and staffed with a Resident Director or Manager. There are Guidance Notes issued by the Regulator to clarify. Vanuatu has no human resources qualified in this industry. You will need to send in a Resident Director with full executive powers to manage the business. Alternatively, you may employ someone fresh as the Resident Manager and submit a training plan for the next 3 years.
The intention of the licensed resident manager is to act and manage the business on behalf of a financial dealer in securities who for some valid reasons could not establish or meet a physical presence required under the act. To satisfy the requirements of the physical presence, the licensed resident manager must be able to show that he/she is vested with some executive powers to manage the day-to-day operations of the licensed financial dealer.
The hiring of a Resident Manager is meant to be a temporary solution, to fill in the gap until he/she is fully qualified to manage and carry on the activities of the licensee with full executive powers. Or to assist the company to a stage where it is financially viable to employ a fully qualified Resident Director to manage the company from Vanuatu.
For the Financial Dealer License application, we will send you a comprehensive Check List of documents to provide. This list is not exhaustive and the Regulator will request for additional information and documents during the Due Diligence process.
Our scope of work is to review all the documentations to ensure they comply with the requirements as best as we can ascertain of maximum prospect of approval prior to submission of the application. We will liaise with the Regulator during the Due Diligence process up until a final decision is made. No additional fees will be charged for the time during this application processing stage.
Reach Us to find out more.
Mauritius is becoming a major financial hub, thanks to the work of the Financial Services Commission (FSC). The FSC regulates non-bank financial services and global businesses, helping Mauritius build one of Africa’s most advanced financial systems.
This makes Mauritius an attractive spot for startups, financial groups, and firms wanting to expand their reach. In this guide, we’ll break down why setting up an Investment Dealer licensed entity in Mauritius is a smart move and what you need to know to get started.
1. Regulatory Framework
To run an Investment Dealer in Mauritius, you need to follow these rules set out in the Securities Act of 2005, along with additional FSC regulations. They cover:
- Standard set on Accounting and Auditing
- Annual Reporting, Financial statements, and other compliance related documents
- Details on offering and issuing securities and its requirements
- Application process and license renewals
- Criteria for granting licenses
- Determining Fit and Proper for a licensee
- Comply with AML and anti-terrorism laws, including the Financial Intelligence and Anti-Money Laundering Act (FIAMLA) of 2002, the Prevention of Corruption Act of 2002, and the Prevention of Terrorism Act of 2002.
2. License Types
Below are different types of Investment Dealer licenses, authorized activities and capital requirements are prescribed belows (as of July 2024):
License Type |
Activities |
Required Capital |
|---|---|---|
| Investment Dealer (Full Service incl. Underwriting) |
1. Intermediary in securities transactions 2. Trade securities as principal 3. Underwrite or distribute securities 4. Provide ancillary investment advice 5. Manage client portfolios |
MUR 10,000,000 (≈ USD 220,000) |
| Investment Dealer (Full Service excl. Underwriting) | Same as above, except underwriting or distributing securities | MUR 1,000,000 (≈ USD 22,000) |
| Investment Dealer (Broker) |
1. Execute orders for clients 2. Manage client portfolios 3. Advise on securities transactions |
MUR 700,000 (≈ USD 15,000) |
| Investment Dealer (Discount Broker) | Execute orders for clients without giving advice | MUR 600,000 (≈ USD 13,000) |
The above reflect the type and description of services a licensee could offer. Minimum capital must be met in order to commence operations.
3. Information to Facilitate
- Detailed business plan
- Trading platform information
- Counterparty in details
- The market the broker is targeting
- Management and staff information
- AML/CFT regulations met
- All Policies and procedures in place
- An office in operations within Mauritius
4. How We Help
We work closely with you to gather necessary information, prepare documents, and submit a complete application according to regulatory guidelines. Subject to your approval, we will help manage your resources efficiently by putting together in-house staff, outsourced arrangements, and third-party providers.
For more details or to discuss about your FSC Mauritius licensing needs, get in touch with us. Our expert team is ready to assist you.
As of July 2024, to proceed to incorporate a CFD Forex International Business Company IBC in St. Lucia, the due diligence requirements are as follows for each director and shareholder that can be sent by email:
- Completed and Signed Application (we will attach for your completion)
- Notarized Copy of 2 IDs (i.e. passport, driver’s license
- Notarized Copy of Utility Bill
- References (professional or bank)
- Bank Statement or Investment Account Statement (i.e. Source of Funds)
Applicant would receive in return:
- Incorporation of the IBC
- Registered office one year
- Registered Agent Fee
- Certificate of Incorporation documents
- Legal Opinion Verification Forex Business License requirement
As of July 2024, the process to apply for a Forex Business in St Lucia is still very straightforward. Please also note that it is a matter of time where regulators will constantly tighten up, as we have seen from St Vincent and the Grenadines, where the people who continued to have the jurisdiction ownership are those IBCs who already had their business registered in the earlier stage, and have grown to a size where they had attained a forex license in another jurisdiction, thus helping them to continue maintaining their SVG forex IBCs.
Reach us as we walk you through this process to your startup.
A buyout of a brokerage firm involves acquiring control, often by purchasing the majority or all of its shares. The process can be complex due to the regulatory nature of the industry, the value of the company’s assets, and considerations like client accounts, licenses, and operational structure. Here’s a step-by-step guide to buying out a brokerage business:
1. Preliminary Research and Due Diligence
a. Identify Potential Targets
- Look for Forex and CFD business operations, Securities business operations, cryptocurrency exchange business operations that aligns with your strategic goals. Consider factors such as market position, client base, technology, and compliance record.
- Look into whether the company has a solid reputation, a sound regulatory standing, and distinctive features that can give your business a competitive advantage.
b. Regulatory Standing
- Ensure the company holds valid licenses in the jurisdictions where it operates. Common reputable regulatory bodies that we typically prefer to deal with in our portfolio of companies awaiting for buyouts include:
- South Africa
- Australia
- Seychells
- Mauritius
- Canada
- Czech Republic
- Lithuania
- Check for any pending investigations, sanctions, or legal actions against the company.
c. Business and Financial Due Diligence
- Assess the company’s financial health:
- Revenue, profits, and EBITDA.
- Balance sheets, including liabilities, debts, and assets.
- Client accounts and the trading volume.
- Review contracts with liquidity providers, technology providers, and other third parties. (if included)
- Evaluate the company’s trading platform and CRM systems to ensure they’re scalable and operationally sound. (if included)
2. Valuation of the Brokerage Company
Valuing a broker dealer company is crucial for determining the purchase price. Consider the following valuation metrics:
- Revenue multiple: Brokerages are often valued based on a multiple of their annual revenues.
- Profitability: Evaluate profitability based on EBITDA or net profits. If they have operating history.
- Client base and assets under management: The quality of the client base, including how active they are and how much capital is managed. If they have operating history.
- Proprietary technology: Trading platforms, CRM systems, or other intellectual property owned by the broker.
- Brand value and market position: If the company has a strong presence in the market, this adds to its value.
3. Negotiation and Deal Structuring
Once due diligence and valuation are completed, the next step is to negotiate the deal. A few common structures for Forex company buyouts include:
a. Equity Purchase
- Acquire the company’s shares directly from its shareholders. This approach allows you to take control of the entire entity, including assets and liabilities.
- Ensure you take into account client obligations, open trading positions, and regulatory capital requirements.
b. Asset Purchase
- Instead of buying the company outright, you may opt to purchase specific assets, such as the trading platform, licenses, or client base. This can help avoid taking on unwanted liabilities.
4. Regulatory Approvals
After agreeing on the buyout terms, seek approval from the relevant financial regulatory authorities. This is crucial, as Forex brokers operate in a highly regulated environment.
- Transfer of licenses: Depending on the jurisdiction, the company’s license may need to be re-approved or reissued in the name of the new owner. Most jurisdictions in the developed economices are more likely to go through this.
- Client notification: In some cases, you may be required to notify clients about the change in ownership, especially if it affects their trading accounts or regulatory protection.
5. Post-Acquisition Integration
Once the acquisition is completed, focus on integrating the company into your existing business structure. This includes:
- Operational integration: Align the acquired company’s processes, technology, and trading platforms with your existing setup.
- Rebranding: If necessary, decide whether to keep the existing brand or integrate it under your own.
- Client communication: Reassure clients about the continuity of services, and highlight any improvements resulting from the acquisition.
- Regulatory compliance: Ensure the company continues to comply with all relevant regulations in its operating regions.
Key Considerations:
- Client Funds: Brokerage companies often hold significant amounts of client money, and ensuring the proper handling and safeguarding of these funds is critical.
- Ongoing Compliance: After acquiring the company, you will be responsible for ongoing regulatory compliance, including regular audits and financial reporting.
- Transition Management: Managing the transition in leadership, employee retention, and keeping morale high during and after the buyout process.
Do you have a specific Forex and CFD business, Cryptocurrency exchange, Securities business, or jurisdiction in mind for this buyout? I can provide more tailored advice depending on the region or company type you’re targeting. Buyout a brokerage business can range from easy to tough, or long to short time in completing the acquisition. Therefore, please feel free to reach us for more information.
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