Prospective Forex brokers who wish to apply for a Forex Broker license need to follow the steps outlined below.
1. Invest Minimum Capital
Every country has a capital adequacy legislation which requires Forex brokering firms to invest a certain minimum capital in order to obtain a license. Since the minimum capital would differ according to each jurisdiction, the applicant should ascertain the exact amount for their respective region.
2. Pay the Application Fee
Just like the minimum capital, each jurisdiction has its own government licensing fee. The licensing procedure would also involve legal paper work which would incur additional costs. The applicant needs to pay the licensing fee and also bear the cost of the legal consultancy service fee.
3. Setup an Office
It is mandatory in most jurisdictions for the licensee to hold a full-fledged office in the country where they acquire their Forex broker license. Here again, there are minimum requirements that are stipulated according to each jurisdiction.
4. Employ Qualified staff
Since the brokerage firm would be handling investors’ money, the firm needs to employ experienced and qualified staff who can do the job efficiently. They should be able to produce positive results financially on behalf of the investor.
Finding qualified staff and handling relocation or immigration and work permits in certain cases could be a complex issue. However, every firm needs to handle these issues to run their firm efficiently.
5. Furnish personal documents
Every director and beneficial shareholder in the Forex brokerage firm needs to furnish documents regarding their financial status, good reputation and character, apart from proof of professional experience and relevancy to the industry.
These documents could include bank and business references, documents from the relevant police department or law enforcement authority, and other similar documents.
6. Setup relevant software
The Forex brokerage firm needs to have a professional business software package in place which is required to conduct the Forex business. There are a number of issues that need to be taken into consideration like features of the software and the hardware configuration of the server required to support the software.
7. Market and Promote the Business
Mere possession of a Forex broker license may not guarantee a constant stream of clients. The firm needs to employ marketing strategies based on an effective marketing plan. Employing a good marketing agency could be one option even if it costs money for advertising and promotion.
These are the steps required to be followed by a firm that wishes to acquire a Forex broker license.