The Bahamas SCB Enacts Sweeping Changes for Bahamas Forex Broker License Applicants and Licensees
In a recent landmark decision, the Bahamas SCB has enacted annual and quarterly cost increases for both licensed brokers as well as new forex broker license applicants. The Securities Commission of the Bahamas, or SCB, for short, officially set these changes into law on May 27th, 2020. As a result of these changes, some brokers interested in applying for a forex broker license are now considering alternative offshore jurisdictions.
How do these changes by the Bahamas SCB Impact Licensed Forex Brokers?
The updates by the Bahamas SCB mostly impact the costs associated with operating a forex broker license in Bahamas. A brief summary of the changes are found below:
- The fee to apply for a forex broker license in Bahamas has increased
- In addition to an application fee, a $15,000 (US Dollars) registration fee has been introduced
- The annual renewal fee has increased
- Quarterly activity fee of $45,000 applies to all licensed forex brokers in the Bahamas
Analysis of the Bahamas SCB Decision to Increase Costs for Licensed Forex Brokerages
A reason behind the Bahamas SCB’s decision to increase costs across the board may be to improve the reputation of the Bahamas by raising the barriers to entry. A quarterly renewal fee of $45,000 is indeed cost prohibitive to most start up and medium sized forex brokers, however, some of the larger players may not mind absorbing the cost.
There is always value in prestige and exclusivity: think flying a private jet, vacationing on an exotic islands, or driving an expensive sports car. Any forex broker that can maintain the costs of operating a brokerage from the Bahamas will indeed stand out from the pack.
On the other hand, forex & CFD brokerages, like all businesses, have to manage their costs. The Bahamas SCB may have been too aggressive by enacting such large price hikes so quickly, resulting in flight from the region and into less costly jurisdictions. Only time will tell us where the cards will fall as it relates to this decision.
As far as alternative regions go, there are plenty of less costly options to consider. Labuan, Malaysia would be a top consideration for forex brokers looking for decent banking options. Another offshore license worth consideration would be Seychelles and possibly Mauritius as well.
Atomiq Consulting – Consultation & Guidance in Forex Broker Licensing
If you firm is interested in applying for a Bahamas forex license, we are happy to guide you along the way and discuss how these new costs will impact the application procedure. Furthermore, we may also have a Bahamas forex broker license on sale, which could be another consideration.
In addition, we can also assist you in obtaining a license in some of the other offshore regions
Have a look at some of the additional services our clients have found to be helpful in the growth of their business.