On January 6, 2023, the Financial Services Authority of Saint Vincent and the Grenadines (SVG) issued a requirement for all active forex brokers registered in the island state to provide certified copies of their licenses received from the regulatory authorities of the jurisdictions in which they are conducting their business activities. The brokers were given 45 days to comply – that is, they must submit the license copies before March 10, 2023.
The innovations also affected those forex brokers who were interested in creating a company on the islands. Now, along with the documents required to register a business, they will have to request a license from the regulatory authorities of the jurisdictions where their commercial activities are to be conducted. If they fail to do so, their applications will not be accepted.
On January 6, the SVG Supervisory Authority notified the registered agents and trustees about the new regulations by sending out a letter entitled “Requirements to commercial companies (BC) and limited liability companies (LLC) involved in the FOREX business activities”.
The Financial Services Authority of Saint Vincent and the Grenadines notes that failing to comply with these requirements will result in sanctions against such companies as outlined in the Financial Services Authority Act.
Failure to follow these requirements may lead to the termination of the forex company and the cancellation of its clients’ accounts. In order to prevent this unpleasant situation and give yourself enough time to issue the licenses, please contact our experts.
Why Did the Authorities of St. Vincent and the Grenadines Tighten the Regulations?
The financial regulator has explained that the new requirements were a response to a sharp increase in the number and frequency of complaints and fraud allegations against offshore brokers and Forex companies operating in the country. In addition, the regulator denounced the “potential detrimental effects” this trend may have on the SVG’s reputation as an international financial center.
In addition, the authority appealed to the registered agents and their trustees asking them to “continue applying good anti-money laundering/terrorist financial practices to ensure the use of the appropriate due diligence procedure and the corresponding risk-based standards of care are applied when registering clients (directors, shareholders, and beneficial owners) who wish to register and set up companies in Saint Vincent and the Grenadines”.
What Is the Anticipated Effect of the New Requirements on Forex-Companies in the SVG?
Over the years, the Financial Services Authority of Saint Vincent and the Grenadines has laid the groundwork for implementing its own set of rules aimed at reducing the risk of fraud that could potentially tarnish the country’s image. The latest innovations are the next logical step in this work. The main goal of the regulator is to increase the international authority of the jurisdiction in the foreign exchange industry, especially considering the information about the successful efforts of the Mauritius Financial Services Commission.
Many Forex participants support the intention of the Financial Services Authority of Saint Vincent and the Grenadines to secure the market from unscrupulous brokers. However, the deadlines set by the regulator are puzzling for most market participants, since registering a license with the FCA (UK), CySEC (Cyprus), ASIC (Australia) or another similar agency takes much more time than allowed by the new decree. Forex brokers need to go through all the stages of the licensing procedures from the very start, including meeting capital formation requirements, recruiting the appropriate staff, etc., in full compliance with the laws of their jurisdictions. All this is virtually impossible to do in such a short time.
If you need to get a license urgently in order to fulfill the requirements of the Financial Services Authority of Saint Vincent and the Grenadines, contact our experts via email at email@example.com. Our team will respond within a few hours and provide all the necessary assistance to make sure you get the required permits before March 10th, 2023.