Looking Beyond Established Regulatory Jurisdictions

In light of the stringent regulatory requirements in jurisdictions such as the United Kingdom, Australia, Cyprus, New Zealand and the United States, the licensing regimes of the Cayman Islands, the Bahamas, the British Virgin Islands and Mauritius appear to be becoming popular destinations for brokerage Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term.

Regulators such as the Financial Services Authority (FCA) in the United Kingdom, the Australian Securities and Investment Commission (ASIC), the Cyprus Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission, the Financial Markets Authority in New Zealand and of course the U.S. Commodity Futures Trading Commission have all imposed tighter regulation on brokerage services in their jurisdictions of late.

A considerable sum of money is involved in setting up a brokerage firm in these jurisdictions in order to meet the upfront costs of the licensing application and the capital requirements to hold the license. The difficulty of obtaining regulation in these jurisdictions may be considered by potential new operators as overly burdensome when the costs of procuring the permit are added to the mix.

In Australia alone, a number of brokerages have been under investigation by ASIC, and in some cases their permits have been revoked, which for many potential operators could be seen as a disincentive to operate locally.

The trend of businesses getting regulated in jurisdictions such as the Cayman Islands, the Bahamas, the British Virgin Islands and Mauritius is growing. It seems that businesses are increasingly investigating the opportunity to obtain a license from these jurisdictions.

Regulatory requirements in these jurisdictions are often seen to be less onerous, with less initial capital requirements and required documentation. There may also be other potential benefits in operating or being licensed in these jurisdictions including tax advantages.

Brokers looking to establish themselves in any jurisdiction should obtain advice from solicitors and accountants with knowledge of the relevant jurisdictions.