Blog Details
How is the Brokerage Services Sector Regulated in Saint Lucia?
1.1 Organizational and Legal Structure for St. Lucia Broker Dealers
Brokerage companies in Saint Lucia are generally incorporated under the International Business Companies Act (IBC Act), Cap 12.14, and usually set up as limited liability entities, also referred to as International Business Companies (IBCs). This legal process is governed by the Registered Agents and Trustee’s Licensing Act (RATLA), Cap 12.12. IBCs can engage in a wide range of legal business activities without needing extra approvals or licenses from the Financial Services Regulatory Authority (FSRA)【source】.
1.2 Restrictions for IBCs
According to Section 12(1) of the IBC Act 12.14, IBCs are explicitly prohibited from engaging in activities such as insurance, banking, or operating as mutual investment funds. Furthermore, IBCs cannot raise capital from Saint Lucia residents or publicly trade their shares. Any FSRA-licensed activities, such as mutual funds, international banking, or international insurance, are also restricted. However, IBCs are free to engage in various business operations as long as they function outside the jurisdiction of Saint Lucia.
Does Brokerage Activity Require a License in Saint Lucia?
2.1 Regulation
As it stands, Saint Lucia does not impose any legal restrictions on IBCs engaging in trading activities. These activities are not explicitly mentioned in the IBC Act, RATLA, or the Money Services Business Act (Cap 12.22). This omission means that brokerage companies can legally conduct trading without the need for special licensing, provided they operate outside Saint Lucia.
2.2 Licensing Requirements
An analysis of current laws and regulations indicates that brokerage services offered by IBCs targeting clients outside of Saint Lucia do not require an FSRA license. This is a significant advantage for companies looking to set up brokerage operations in this jurisdiction.
How to Start a Broker Dealer in Saint Lucia
Application Process
To establish an IBC for brokerage purposes, applicants must submit a detailed application. This ensures that only qualified and reliable businesses gain approval, demonstrating their ability to meet Saint Lucian standards.
Due Diligence
A thorough due diligence check will be conducted on the company’s directors and key personnel. The Business Registrar will assess their integrity and competence to operate a brokerage firm.
Compliance and Operational Setup
Brokers are required to implement robust compliance frameworks in line with Saint Lucian laws, including strict Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures.
Approval and Maintenance
Once the brokerage is approved, the IBC incorporation is complete, and the company must adhere to ongoing compliance obligations. Maintaining a strong reputation and meeting regulatory standards is crucial for the company to remain in good standing.
Conclusion
Establishing a broker dealer in Saint Lucia offers multiple advantages, such as regulatory simplicity, tax benefits, cost-effectiveness, and a prime geographic location. For brokers looking to launch a new operation, Saint Lucia presents an excellent opportunity. In our view, this is a prime jurisdiction for startups and seasoned brokers alike to explore.
If you’re considering setting up a brokerage business, feel free to reach out and share your plans with us.
