The dealing in contracts for difference, derivatives in relation to foreign exchange, and/or rolling spot forex carried out in Malta or from Malta is licensable in terms of Malta’s Investment Services Act. CSB Group assists clients with the incorporation of a Forex Trading Licence to establish a structure within which to trade and invest funds safely.
Licensing of Online Trading Activities of Rolling Spot Forex and Derivatives
Several operators are looking towards Malta as a base for their operations in this sector, owing largely to the island’s advanced technological infrastructure, solid regulatory framework, attractive corporate tax system and the possibility of passporting the Malta licence to all other EU member states for the purpose of targeting consumers based in those jurisdictions.
The structuring of businesses involved in the online trading of rolling spot forex and derivative instruments invariably falls into two broad categories, namely:
- those acting as a “riskless principal” and executing orders received through its system by passing on the trade or position to another principal at the same time and price as that ordered by the customer- these would require a Category 2 Investment Services licence; or
- those dealing on their own account, against their proprietary capital- these would require a Category 3 Investment Services licence.
Both categories are subject to an initial capital of €730,000.
Passporting a Malta Forex Licence
Once the relative Malta licence is obtained, it would then be possible to passport such licence into the EU member state countries by following some basic procedures of notification. This would enable the Maltese licencee company to provide its services within the relevant member state/s either through the establishment of a branch or remotely, under the freedom to provide services.