As paradoxically it sounds, but the answer can be positive in both cases. Everything depends on that, how competently the broker placed priorities and approached the choice of the license.
On the one hand, the license for implementation of broker activities – not just a piece of paper in a frame on a wall of office, or the picture on the website. It is the efficient tool capable to repeatedly raise a customer confidence. Many traders consider that it is safer and more reliable to work with the regulated broker, and, respectively, open more willingly and fill up accounts.
Besides, banks and payment service providers often also prefer to work with the licensed companies therefore the regulated broker can choose that financial partner, which to him to liking, but not the one who at least agreed with it to work.
But other party, in this remarkable barrel of honey there is a fair portion of tar. It is high price which includes not only the registration fee for receipt of the broker license, but also requirement to the equity and, often, very essential monthly office expenses and the state in the country of licensing. In this context the broker needs to understand very well what amount it is ready to allocate for obtaining and servicing of the license without prejudice to business.
Agree, having given everything to the last to receive a treasured piece of paper and entry in the register, the broker just risks not to live till that happy day when its license begins to pay off.
In case of all richness of the choice, what alternatives the beginning broker have?
In case of the choice of the regulator, the broker needs to consider a set of aspects, comparing pluses and minuses of various licenses with the business model and financial opportunities.
Window to Europe
If you are ready for serious expenses, it is possible to think of the European broker license. It raises directly the status of the broker in the opinion of clients and opens before it a door on the extensive European market, but at the same time demands considerable costs. For receipt of the license it is possible to distinguish Great Britain, Cyprus, Bulgaria, Lithuania and Latvia from the most popular European jurisdictions.
All are equal …
All European Union countries in questions of regulation submit to the European directive on the financial markets and tools and other regulations of the EU. It means that
• having obtained the license of the broker in one European country, it is possible to work successfully at the territory of all European Union after the simple procedure of "certification"
• – conditions and dates of receipt of the broker license will be approximately identical: the authorized capital from 125 thousand euros depending on the broker's business model, the term of consideration of the request – 3-5 months, the registration fee from 18 thousand euros and obligatory availability of the office in a country of incorporation.
… but some are more exactly different than others
Despite formal similarity of conditions, distinctions after all exist.
Management on financial regulation and supervision of Great Britain (FCA) is among the most prestigious regulators in the world. It demands from the companies maximum of informational content and honesty. The broker license FCA is considered one of the most best and reliable.
The Cyprian Security and Exchange Commission (CySec) is a gold core, a profitable combination of flexible requirements and reliability. Its extreme popularity among brokers and traders is explained by it.
The Bulgarian commission on financial services (FSA) and the Commission of Latvia on supervision of the financial market and the capital market – two young and very perspective European regulators with loyal and rather simple procedure of receipt of the license. Besides, these countries have one more powerful benefit to the beginning broker: office services in Bulgaria or Latvia manage in two, and even is three times cheaper, than in Cyprus, without speaking already about London.
Europe is too expensive?
In general, practice shows that most of new players in the market prefer to begin with the most loyal and economically attractive offshore jurisdictions with the preferential taxation, such as Labuan, Belize, Vanuatu and the British Virgin Islands. In most cases in such jurisdictions it isn't required to bring the authorized capital or to provide physical presence at a country of incorporation.
To obtain the license of the Commission on the international financial services of Belize (IFCS) the broker needs to pay state duties in the amount of 16 thousand dollars to deposit the local bank account the authorized capital in the amount of 50 thousand dollars, to submit the application and to wait two-three months.
The commission on financial services of the British Virgin Islands (FSC) (BVI) also enjoys popularity at Forex brokers. This regulator has good reputation, and the British Virgin Islands and are entered in "the white list" of offshores of Organization for Economic Cooperation and Development.
The cost of registration is rather low – from 13 thousand euros, the size of the authorized capital from 50 thousand euros, and all process takes 6-8 weeks.
Actually, at the beginning investments into marketing campaigns and into innovative technologies of trading will be brought by much more notable surplus of client base, than registration in prestigious jurisdiction.
Offshore jurisdictions – the fine cost-efficient decision for young broker business!
Often at the beginning brokers lack experience and knowledge independently to pick up the
optimal solution and to be painless all way from application before receipt of the ready license.
In this case it is the best of all to address specialists who well know all legal niceties of process and will undertake bureaucratic formalities.
Three steps to the license of your dream from B2Broker
• Step 1. Consultation: we will help to pick up the license most of which fully corresponds to your requirements.
• Step 2. Preparation of documents: you collect a necessary packet of documents – we do all the rest.
• Step 3. Receipt of the ready license: now there is a little patience, and now our congratulations!
You are now the licensed broker!
To learn in more detail about conditions and benefits of licensing, or to request the commercial offer, just call us by phone +7 499 649-60- 65, or write on the e-mail address firstname.lastname@example.org