News: Obtaining forex license in Malta

After Malta became a full member of the EU, its legislation was brought in line with common European standards and rules.

The entity that plans to obtain a license to conduct financial activities in Malta may not have to worry about its reputation, since Malta is primarily a country with successful and developed economy and tax legislation. In addition, after obtaining a brokerage license in the territory of Malta, the entity will be able to carry out its activities in accordance with the established European directives.

To obtain a license of this kind, the company must form a special fund and rent an office in Malta. In addition, another prerequisite for obtaining a forex license is employment of professional and responsible personnel.

It is also worth noting the existence of such an obligatory factor as the regular reporting of the enterprise, which is necessary for the enterprise that was granted a forex license.

Also, the company that holds this license must necessarily adhere to the letter of the law and report to the state body, which regulates tax relations and financial services.

As for the regulator itself, which operates in the territory of Malta, it is the Bureau on the Issues of Financial Services of Malta. This Bureau is responsible for issuing all kinds of permissions and licenses, which also include various kinds of forex services and banking activities.

Regarding investments, then we can note the following services:

• targeted placement of financial mechanisms that do not relate to the obligation of the enterprise;
• placement of such instruments that depend on the obligations of the enterprise;
• regulation of personal accounts;
• performance of custodian services and similar services by functional obligations;
• placement of investments, as well as other duties that are not included in the specified list.

Now let's consider the forex licenses that can be issued in Malta.

2-STP can be referred to the first category of licenses. Applying this type of license, the brokers send out orders on behalf of their clients to foreign banks with free access of buyers to the real market and market prices.

The second type of license is a third category license. When this type of license is obtained, the broker personally can dispose of the financial assets of his clients and regulate prices, that is, conduct activities directly with the markets.

Licenses of the second and third categories will suit those who are primarily interested in Binary Options and Forex.

It is also worth noting that a fixed charter capital is required for a forex license, which for the second category is 125 thousand euros, and for the third category license is 730 thousand euros. Capital itself must be deposited with a local bank, even before a person has obtained a license. Total amount of capital for conducting activities should always be at the level not less than the minimum declared for the chosen type of license, but at the same time the enterprise can attract this amount to investments for the sake of highly liquid assets, for example, government bonds.

As to the timing of obtaining a forex license in Malta, the analysis of the submitted documentation to the Maltese government bodies and its approval takes from 4 to 6 weeks.

Then follows the decision to issue a license, which takes from 6 to 12 weeks, and the entire process takes from 5 to 7 months.

Important element is the submission of reports on the activities of a company holding forex license:

1. For licenses of the third category, it is necessary to file financial statements every month, and reports on transfers and transactions must be submitted every day.
2. For persons of the second category, financial reporting on the activities of the firm should be submitted quarterly.

As for the audit report, it should also be carried out and is submitted once a year.

The company Law&Trust International has vast experience in obtaining licenses of any complexity. For more detailed information, please contact our specialists.