Eternity Law International Forex brokers Forex broker license in Australia

Forex broker license in Australia

February 13, 2017

Forex brokers in Australia are regulated under the Corporations Act 2001 and are considered a subspecies of over-the-counter contracts. Accordingly, buying and selling on the forex online market is also considered a financial activity that can only be carried out in Australia with a special license.

Under the Corporations Act, financial services companies must be established and licensed in Australia.

Thus, the activities of companies associated with the forex market are subject to licensing.

In Australia, forex companies are considered to be companies providing financial services and must be licensed to specify what services the company can provide.

Section 3, Part 7, of the Corporations Act contains a definition and list of financial services for which financial services listed in Section 4 of Part 4 of the said law may be provided.

Providing financial services by a company to private clients requires it to be ready to fulfill all obligations to protect the interests of such clients, to which the Commission pays special attention when making a decision to issue a license.

Fees – Australia Forex Broker License

  • License application fee (one-time) USD 1,485
  • Fee for making changes to the terms of the current license USD 249
  • Financial reporting fee USD 549
  • Notification fee for appointing an auditor USD 36
  • Annual license fee USD 1,086

How to get A Forex Broker License in Australia – A Forex Broker License in Australia

Filling out questionnaires of all founders, managers and key employees of enterprise and all of the necessary documentation confirming the authority of persons, their experiense and knowledge of the business;

Filling out an FS01 application and attendant documentation.

In the application form, the applicant must select financial products and types of financial services that he intends to provide in relation to such products.

The applicant must also submit to the Commission comprehensive evidence that confirms: sufficient competence of his employees, sufficient financial resources and readiness to ensure the compliance with license terms and also and all requirements of the legislation and the Commission.

Including internal regulations and policies (for example, on combating money laundering, risk management, ensuring compliance with licensing and legislation, etc.).

  • The Commission has the right to require the applicant to provide any information and documents that are deemed necessary;
  • Business plan preparation;
  • Appointment of at least 2 resident managers and an employee who will monitor the legal entity’s compliance with all license terms and legal requirements;
  • Submission of documentation to the regulator;
  • After acceptance by the regulator, it is necessary to draw up liability insurance policies to the Company`s customers;
  • After fulfilling all the conditions specified by the Commission in the preliminary decision to issue a license within the time frame established by it, the company will obtain a license and may start operating;
  • Within a month, appoint an auditor and notify the Commission about it.

Terms of obtaining A Forex Broker License in Australia – A Forex Broker License in Australia

Due to the fact that there are no exact terms for consideration of the application, the license is issued when:

  • The application complies with all the requirements of the law;
  • The applicant is able to ensure compliance with all obligations imposed on him by the license and legislation;
  • Applicant has adequate operating rules and procedures to ensure the normal provision of financial services;
  • The applicant has entered into all the necessary agreements and contracts, the presence of which is necessary for the normal provision of financial services to them;
  • The applicant`s managers and staff meet all the criteria set by the commission for their education, knowledge and experience.

Control of the licensing authority over the activities of the Forex Broker License in Australia

The Commission constantly monitors the activities of the Company and also controls its compliance with all license conditions and legal requirements.

The company, which is considered small under Australian law, is obliged to submit financial statements to the Commission within 1 month after the end of the fiscal year and audited financial statements with the conclusion of the independent auditor within 3 months after the end of the fiscal year.

A financial services company is considered small if it meets two or more of the following criteria:

  • The company’s net assets do not exceed USD 5,000,000;
  • The company’s gross income does not exceed USD 5,000,000;
  • The total number of employees does not exceed 20 people.

In all other cases, the company is considered medium or large. It is required to submit financial statements to the Commission within 2 months after the end of the financial year and audited financial statements with the conclusion of an independent auditor within 4 months after the end of the financial year.

Grounds for suspending and/or revoking the Forex Broker License in Australia – A Forex Broker License in Australia

The legislation establishes a clear list of grounds for suspension and / or cancellation of a license, in particular:

  • violation of the laws established by the regulation, including in the case of submission of false information to the Commission;
  • failure to comply with the requirements of the Commission;
  • termination of the provision of financial services by the license holder or suspension of the provision of such services for more than 6 months;
  • Non-payment of state fees.

Working with clients of Forex Broker License in Australia – A Forex Broker License in Australia

Doing business with U.S. residents is strictly prohibited. There are no legislative restrictions on other regions.

However, a forex company licensed by the Commission must obtain its permission to operate on the territory of other states.

Customer Complaints Procedure – Australia Forex Broker License

The law provides that all client complaints must be considered by the company (or the designated employee), and the results of the complaints must be communicated to the client in writing.

In addition, the company must have an internal position that will describe in detail the procedure for resolving disputes with customers.

The company is obliged to inform all private clients about their right to file complaints against the Company with the Financial Services Consumer Protection Commissioner.

Requirements for shareholders, authorized capital, personnel, office of FOREX BROKER IN AUSTRALIA

The general requirement for shareholders of a forex company is knowledge of this type of financial services and to be able to maintain the financial resources and assets of the company at any time, at least at the minimum required level.

In accordance with the practice of obtaining a license, the Commission requires at least one Forex shareholder to have at least 3 out of the last 5 years experience in a regulated Forex company in Australia or other yurisdiction.

There are no legal requirements for authorized capital – Australia Forex Broker License

Forex broker must support tangible assets:

from January 31, 2014 – 10% of the annual income, but not less than USD 1,000,000, if the forex broker is not a dealing center;
5% of the annual income, but not less than USD 10,000,000 if the forex broker is a dealing center.
The company must have at least two Australian resident directors throughout the license period, an employee who will oversee the Company’s compliance with all license conditions, legal requirements and the Commission, and a sufficient number of employees to provide quality financial services.

The company must have a physical office in Australia. The use of mailbox companies is prohibited.

The legislation contains special requirements for any information, including advertising, disseminated by the company. Thus, a forex company must ensure that the information it distributes is clear, reliable and does not mislead customers.

Advertising FOREX BROKER SERVICES IN AUSTRALIA – Australia Forex Broker License

The law stipulates that a forex company can distribute advertising information only after obtaining a license for such activities. There are no restrictions on the types of advertising and the methods of its distribution.

Punishments of FOREX BROKER IN AUSTRALIA – License of a forex broker in Australia

Australian legislation does not contain an exhaustive list of sanctions that the Commission and other regulatory authorities apply to violators of the license terms and the legislation applicable to the activities of a forex company.

Under the law, the Commission has extensive powers in the choice of sanctions, which include administrative, civil and criminal liability, depending on the seriousness of the wrongful conduct and its consequences.

When choosing the type of liability, the Commission pursues the following goals: punishment of the offender and protection of the interests of the investor and their assets.

The Commission applies a wide range of measures to punish offenders, which can include criminal liability in the form of imprisonment or correctional labor for serious offenses, and civil and administrative penalties in the form of fines for less serious offenses.

Based on the results of the investigation, the commission has the right to independently determine the amount of sanctions that apply to the company and its management, taking into account many factors. The minimum fine is USD 550 (for example, for a financial report or notification required by law not submitted in time to the Commission).

For more serious offenses, the Commission, at its discretion, has the right to sanction a forex company in the form of license revocation, as well as to impose fines in the amount of up to USD 495,000 or three times the amount of the benefit received.

In addition, the guilty company official can be imprisoned for up to 10 years. The company’s license may be revoked if the Commission has reasonable suspicions about the impeccability of the business reputation of one or more of its employees.

The cost of obtaining A Forex Broker License in Australia – A Forex Broker License in Australia

The cost of services for obtaining an investment license in Australia depends on the amount of time spent by the specialists of Eternity Law International.

The cost of submitting forms and maintaining a license can range from USD 22,000 to USD 45,000.

If you need to register a company with a forex broker license in Australia, then our specialists will help you quickly and efficiently register a company with a forex broker license in Australia. Also, you can buy a ready-made company with a forex broker license in Australia.

Write to us in the CRM form and we will help you obtain a forex broker license in Australia.

The specialists of Eternity Law International will provide you with expert advice on obtaining a license in a suitable jurisdiction.

Ready-made licenses for sale are available. Make a request.

If you still have questions about obtaining a license in Australia or another jurisdiction you are interested in, contact our specialists for detailed advice or write to us in the CRM form at the bottom of the page, our specialists will answer you online.

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