The Bahamas SCB Enacts Sweeping Changes for Bahamas Forex Broker License Applicants and Licensees

As a result of recent cost changes by the Bahamas SCB, operating a forex broker license in the Bahamas has now become more expensive.

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 (SCB) officially set these changes into law on May 27th, 2020. As a result, some FX brokers which initially expressed interest in applying for a forex broker license in the Bahamas are now considering alternative offshore jurisdictions.

How do the Changes by the Bahamas SCB Impact Licensed Forex Brokers?

The specific changes by the Bahamas Securities Commission increase broker operating costs at a variety of levels. A brief summary of the updated fees 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

  • A 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

One 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. Some of the larger players, however, may not mind absorbing these increased costs.

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 successfully 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 expenses. The Bahamas SCB may have been too aggressive by enacting such large price hikes so quickly, resulting in a flight to less costly jurisdictions. Only time will tell where the cards may fall as it relates to the decision by the Bahamas SCB.

Forex brokers looking for alternative offshore regions have several cost effective options to consider. Labuan, Malaysia would be a top candidate for brokers that require access to competitive banking options. Another offshore forex broker license that should’t be ruled out would be Seychelles. Finally, Mauritius would be a region that brokers should also add to their list of possibilities.

Atomiq Consulting – Forex Broker Licensing Consultation & Guidance

If you firm is interested in applying for a Bahamas forex license, we are happy to guide you along every step of the way and explain how these new costs will impact the application process. Additionally, don’t hesitate to ask us about any Bahamas brokers on sale as we normally have one or two offshore options available via our Forex Marketplace.

To learn more about applying for a forex broker license in the Bahamas or another offshore region, simply contact us today!

Have a look at some of the additional services our clients have found to be helpful in the growth of their business.

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