In most jurisdictions a forex or CFD broker is an investment firm or securities dealer that also deals in leveraged derivatives. The capital class depends on whether you act as agent or take the other side of client trades, and retail clients in the EU and UK are protected by strict leverage and margin rules.
A CFD (contract for difference) is a derivative that pays the difference in the price of an underlying asset, such as a currency pair, index, commodity or share, between opening and closing a position. In the EU and UK, CFDs are financial instruments, so the broker needs an investment firm authorisation rather than a special forex licence. Offshore centres use securities dealer, investment dealer or financial dealer licences that follow a similar logic.
The key decision is the execution model. If the broker passes client orders to a liquidity provider and does not take market risk (an agency or straight-through model), its activities are order execution and the reception and transmission of orders. If it takes the opposite side of client trades or acts as a market maker, it deals on own account, which is the most demanding class: €750,000 in the EU, £750,000 in the UK and USD 500,000 base capital in the AIFC.
Holding client money also raises the class: in the EU and UK an agency broker that holds client funds needs €150,000 or £150,000 rather than the minimum. The full activity map is on the investment firm licence page.
Only requirements confirmed against official sources as of 15 October 2026 are shown. Offshore leverage and conduct rules beyond those listed are checked for each project.
| Jurisdiction | Regulator | Regime | Key points |
|---|---|---|---|
| EU (MiFID II) | National competent authority, e.g. CySEC, Bank of Lithuania, Czech National Bank | Authorisation | Market making or dealing on own account: initial capital €750,000; agency model holding client money: €150,000. Retail benchmark set by the ESMA measures: leverage 30:1 to 2:1 by underlying, 50% margin close-out, negative balance protection, binary options ban |
| United Kingdom | Financial Conduct Authority (FCA) | Authorisation | Dealing on own account: permanent minimum requirement £750,000. Permanent retail restrictions on CFDs since 1 August 2019 and on CFD-like options since 1 September 2019: leverage 30:1 to 2:1, 50% close-out, negative balance protection, standardised risk warning |
| AIFC (Kazakhstan) | AFSA | Authorisation | Dealing in investments as principal: base capital USD 500,000 (matched principal only: USD 50,000), plus capital for credit, market and operational risk for dealing firms; dealing as agent: USD 50,000 |
| Kazakhstan (national regime) | ARDFM | Licence | Broker-dealer licence on the securities market; whether and how a specific leveraged product may be offered to Kazakhstan clients requires a separate analysis |
| Seychelles | Financial Services Authority (FSA) | Licence (securities dealer) | Paid-up capital of USD 100,000; office and middle- and back-office functions in Seychelles (the front office may be abroad); licensed representative and compliance officer; annual licence |
| Mauritius | Financial Services Commission (FSC) | Licence (investment dealer) | Minimum stated unimpaired capital by category: from MUR 600,000 (discount broker) and MUR 700,000 (broker) to MUR 1,000,000 (full-service dealer without underwriting) and MUR 10,000,000 (with underwriting) |
| Vanuatu | Vanuatu Financial Services Commission (VFSC) | Licence (financial dealer, principal's licence) | Class A covers debt securities and currency, and Class C futures and derivatives; no statutory minimum capital; VT 5,000,000 deposit; insurance of at least VT 5m per claim and VT 50m in aggregate; local office and resident manager or director |
| Labuan (Malaysia) | Labuan Financial Services Authority | Licence (money broking) | Paid-up capital of RM 1,000,000 (RM 1,500,000 if digital assets are involved); leverage up to 100:1 on currencies; no dealing as principal; institutional and high-net-worth clients only; office in Labuan and at least two board members |
Regulatory capital is separate from state and application fees, operating costs and our fees. Our fees are agreed after the project assessment.
We define the execution model, products, leverage and target countries, and identify where retail clients may and may not be served.
Comparison of EU, UK, AIFC and offshore routes; capital, fees and operating budget shown separately.
Company formation, key persons, platform and liquidity providers, shortlist of banks and payment providers.
Business plan, execution and risk policies, AML framework and platform description are prepared and filed.
Questions, interviews and document updates; demonstration of platform controls where the regulator asks for it.
Capital paid in, client money arrangements in place, onboarding and marketing start within the permitted markets.
The Seychelles FSA guidelines indicate 30 working days to review a complete securities dealer application; the AFSA authorisation guide sets no fixed period. EU and UK reviews follow national procedures. Actual timing depends mostly on the execution model, the quality of risk and AML documentation and the readiness of the platform and banking set-up.
Authorisation for brokerage, order execution, dealing on own account and portfolio services in securities and other financial instruments.
Learn moreRisk assessment, policies, KYC/KYB, sanctions and transaction monitoring, travel rule and inspection readiness for licensed and to-be-licensed financial and crypto businesses.
Learn morePayment services linked to digital assets, e-money, payment apps and infrastructure.
Learn moreExecuting client orders, agency models, access to foreign venues and liquidity.
Learn moreDescribe your project in a few sentences. We will give you a substantive reply: which questions need answering and where to start.
Discuss your projectIn the EU and UK, no: a forex or CFD broker is an investment firm and needs an authorisation covering the relevant activities and instruments. Offshore regimes use securities dealer, investment dealer or financial dealer licences. See also the investment firm licence page.
Yes. Taking the other side of client trades is dealing on own account: €750,000 in the EU, £750,000 in the UK and USD 500,000 base capital in the AIFC. An agency broker usually falls into a lower class, but holding client money raises it.
Under the ESMA measures: up to 30:1 on major currency pairs, 20:1 on non-major pairs, gold and major indices, 10:1 on other commodities and non-major indices, 5:1 on equities and other underlyings, and 2:1 on crypto-assets. Margin close-out at 50% per account and negative balance protection also apply.
Marketing to those clients without local authorisation is restricted, and reverse solicitation covers only genuine requests initiated by the client. It cannot be a business model. We help define target markets and geographic restrictions so that the structure matches what the licence permits.
Banks and payment providers often treat forex and CFD brokers as high risk and decide case by case. A licence, a sound AML framework and clear client geography improve the position, but no one can guarantee account opening or card processing.
There are two routes: the AIFC under AFSA rules and the national regime under ARDFM. Each has its own rules on clients and products, and we assess the route for each project separately.
We do not perform regulated functions ourselves. We help select, prepare and support the persons the company appoints, and can discuss outsourced support models where the law allows; this is confirmed for each project.
Tell us about your products, execution model and target countries. We will show which licence class fits, which markets the structure can serve and what capital, fees and operating costs to plan for, as separate items.
We will review the description and give you a substantive reply: which regime may apply and where to start.
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