FX Brokers

 

The FX market is the largest and most liquid market in the world.  It is a decentralised market where brokers and dealers negotiate directly with one another.  FX brokers falls under the Investment Services Act and are regulated by the Malta FSA.

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The business of online foreign exchange trading is generally provided by being a:

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1. Market Maker (dealing on own account), or

2. STP broker  / white label partner, in which the risk is assumed by the underlying Market Maker / Liquidity Provider.

 

In case of (1) above, the minimum share capital is of Eur750,000 whereas in case of (2) it is generally Eur150,000.

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A Malta license FX broker is allowed to Passport its license, that is, to establish a branch, or provide services, in other EU member states or EEA as per the Markets in Financial Instruments Directive 2004/39/EC.

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In case of CFD Brokers, particularly when Market Makers, given the high propensity for investors' losses, the Malta FSA might impose additional restrictions.  

 

For more details on the Allowed Activities, License Classes and related Initial Minimum Share capital please refer also to: Investment Firms and for the possible fiscal advantages refer to the Taxation section.

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