Obtaining a Forex License in the UK
Financial service activity, particularly Forex markets, requires a special license. This license allows enterprises to render services at a high professional level and contributes to its business reputation. In turn, the client can be confident in the safety of their investments and the seriousness of their partners’ intentions.
Financial Brokerage License FCA of GB is one of the most prestigious in the world along with the US. According to Article 31 of the EU "Markets in Financial Instruments Directive» (MiFID) a European company with a financial license has the right to render investments and ancillary services pointed in the license in the countries of the European Economic Area.
To obtain a financial brokerage license it is necessary to register the company in the territory of Great Britain. The preferable form of a legal entity's incorporation for the financial activity is a limited company (LTD).
One of the most competent licensing and regulatory bodies in the financial sector (including Forex) in Great Britain is the Financial Conduct Authority, FCA. FCA is an independent body financed by deposits from companies applying for a license but it is accountable to the Treasury and the Houses of Parliament. The organization was founded in 2013 and is the successor of the UK Financial Services Authority, FSA.
IT-OFFSHORE specialists provide comprehensive assistance for LTD registration in Great Britain by opening bank accounts and providing full support up to obtaining the FCA license.
The license is issued for the following activities:
- Providing access to online trading
- Futures contracts management
- Currency trading in the Forex market
- Trade in Contracts for Difference
- Trade in securities on marginal basis
- Asset management
- Financial consulting
FCA considers market activity as bookmaking which restricts companies from applying for financial brokerage license.
The characteristic brokerage activity licensed by FCA is that the broker provides the technology of traders and investors’ cooperation, then the investor's funds are kept on separate accounts and are beyond the reach of a broker.
Our service package includes the following:
- Company registration in Great Britain
- Preparing the documents for obtaining a license (Memorandum and Articles of Association, the list of shareholders, documents evidencing professional skills)
- Payment for government fees
- Transmission of registered capital
- 3 year business plan and development of the company's internal policies
- Recommendations on banking options and opening an account in the selected bank (preferably in Great Britain)
- Providing a registered office
Stages of obtaining a license:
- LTD company Registration in Great Britain
- Opening a bank account in Great Britain (the director’s personal presence is required)
- Transmission of the company’s authorised capital and a confirming bank document receipt
- Completion of required forms to obtain a license, questionnaire and application with the director and compliance officer data whose nominations require the approval of the regulator.
- Payment of government fees for completing and processing the application for a license
- Submission of documents to the FCA (Founders Agreement, Articles of Association, Shareholders register, business plan, AML and documents in compliance with the monitoring program, company’s corporate structure, financial reports spanning 3 years, documents on Internal Capital Adequacy Assessment Process as well as the level of professional qualifications and the executive director’s professional experience)
- Filing an application with the FCA to obtain forex license.
- Support during the license receipt procedure
The Cost Includes:
- Expenses incurred during company registration
- Providing office space
- Opening an account with a local bank
- Setting up a package of documents for obtaining a license
- Completing the application formsConstruction and submission of application for licensing
- Support during the entire license registration procedure from the moment of submission of documents to the FCA up to obtaining a license.
Timeframe for obtaining a license:
The maximum timeframe for a FCA financial brokerage license receipt from the moment of documents submission can be upto 1 year.
1. FCA makes high demands on the licenseable company's personnel, particularly the Executive Director nominee. The Director should demonstrate to the regulator his understanding of the financial market segment within which the company intends to operate. Besides evidence of professional qualifications, experience in the field is required. The director should be a resident of Great Britain for the term of company’s activity; this fact can be verified by the regulator. If the fact of company's management from abroad is made known, the license can be revoked. For a limited liability joint-stock company (LTD) registration there should be minimum of one founder e.i. private individual with no residency requirements.
2. Members of the Company:
- Minimum one director, a private individual of any residence who should be on the territory of GB for the time during the regulator considers the documents
- Compliance officer who cooperates with the regulator concerning company’s activity and its compliance with the legislation
- Secretary is not necessary
A mandatory condition for obtaining an FCA license is the existence of an actual office space suitable for work. You will need to have all the necessary devices such as Internet and phone.
Registered Capital Requirements:
The registered capital of the company with a brokerage license depends on the type of services provided by the company:
- £100 000-£125 000 in case the company is engaged in broker activities involving customer funds (e.g. STP broker)
- £730 000 - £1 000 000 for companies operating on the market-maker model or Dealing Desk Broker who conducts operations at their own expense and on their own behalf (buying and selling currencies, assets, securities), i.e. to influence the market. The total registered capital sum should be transferred to the bank account by the time of documents submission and cannot be used for the company’s activities.