1. A Forex Trading Company in Cyprus needs to be licensed by the Cyprus Stock Exchange Commission to operate as a Cyprus Investment Firm (CIF) and provide foreign exchange services where these are connected to the provision of investment services. The type of services that will be offered by the Forex Trading Company is solely based on the type of CIF they would like to be. Typically other Forex Trading Companies apply for Reception and Transmission of Orders, Execution of Orders and Dealing on Own Account when they have their own trading platform however there are a few that also apply for Investment Advice and︀ Portfolio Management.
2. According to the Law the capital requirements are as follows:
A CIF︁ that provides reception and transmission of orders in relation to financial instruments and/or execution of︂ orders on behalf of clients and/or portfolio management and/or provision of investment advice and holds clients' money or/and client’s financial instruments, must have an initial capital of at least two︃ hundred thousand euro (€200.000)
A CIF that provides reception and transmission of orders in relation︄ to financial instruments and/or provision of investment advice and does not hold clients' money or/and︅ clients’ financial instruments, and which for that reason may not at any time place themselves︆ in debt with their clients, may have an initial capital of at least eighty thousand︇ euro (€80.000); or at least forty thousand euro (€40.000) and professional indemnity insurance covering all︈ member states or some other comparable guarantee against liability arising from professional negligence, that it︉ enters into with an insurance undertaking, representing an amount of at least one million euro︊ (€1.000.000), per claim, and in aggregate at least one million five hundred thousand euro (€1.500.000)︋ per year for all claims.
A CIF that provides one or more of the following︌ investment services or/and performs the following investment activities shall have an initial capital of at︍ least one million euro (€1.000.000):
(a) dealing on own account;
(b) underwriting of financial instruments︎ and/or placing of financial instruments on a firm commitment basis;
© placing of financial instruments️ without a firm commitment basis;
A CIF that wishes to apply, for example, for dealing on own account and reception and transmission of orders will need to have an initial capital of €1.000.000.
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