Frequently Asked Questions about Seychelles Securities Dealer License
A securities dealer, also known as a securities broker or brokerage firm, is a company or individual that buys and sells securities on behalf of its clients. This includes stocks, bonds, options, and other financial instruments. Securities dealers may also provide investment advice and financial planning services to clients. They typically earn a commission or fee for their services. Some securities dealers, known as market makers, also hold inventory of securities and facilitate trades by matching buyers and sellers.
A Seychelles Securities Dealer License allows a company to legally operate as a securities dealer in the Seychelles. This means that the company is authorised to engage in activities such as buying and selling securities, providing investment advice, acting as a market maker or underwriter and operating a securities exchange or trading platform.
Obtaining this license requires meeting certain regulatory requirements, such as passing background checks, providing financial statements, policies, procedures, and maintaining certain levels of capital.
Yes, there are no restrictions imposed on foreigners in this respect.
No, it is not necessary as the process if fully remote.
- KYC documents preparation by the client
- Review of the documents by our team
- Payment of a first installment
- Company incorporation (less than 1 week)
- Documents and forms preparation and review
- Payment of a second installment
- Licence application
- Review of the application for completeness by the Regulator
- Processing and feedback on deficiencies
- Request of additional information by the Regulator if necessary
- Approval or denial of the license
- Reporting the licensed entity registration
Pursuant to Financial Services Authority (FSA) requirements, each licensee should appoint a Compliance Officer who will be responsible for the maintenance of adequate systems and controls to ensure compliance with the law, regulations, codes, guidelines and directives issued by the Authority. The Compliance Officer must be approved by the Seychelles FSA. The appointed person may be a member of the board of directors.
A Securities Dealer is required to have its accounts audited annually by an auditor. The FSA mandates filing annual returns and submit financial statements. Finally, the Securities Dealer Licence is valid for a period of one year and must be renewed annually.
A standard corporate tax rate of 15% reduced to 1.5%. Securities Dealers can benefit from a tax rate of 1.5% applicable on the assessable (gross) and 0% withholding tax rate on dividends or interest payable, provided that the substantial activity requirements are met by the Securities dealer.
In order to meet the substantial activity requirements, the Core Income Generating Activities of the Securities Dealer must be undertaken in a physical office in Seychelles by:
(a) employing an adequate number of suitably qualified persons to carry out the core income generating activities; and
(b) incurring an adequate amount of operating expenditures for such activities.
The substantial activity requirements are considered to have been met if the middle office and back office activities are conducted in Seychelles even though the front office activities may be undertaken outside Seychelles.
When considering the fitness and propriety of the applicant the Seychelles Financial Services Authority (FSA) shall have regard to the applicant’s:
- financial status;
- educational or other qualifications or experience having regard to the nature of the application;
- ability to perform his proposed function competently, honestly and fairly;
- reputation, character, financial integrity and reliability;
- satisfactory completion of any examination requirements prescribed by the FSA.
The licensing process usually takes around 5-6 months if all the documents are in order. Application timeframe will depend on the complexity of ownership structure, commercial proposition, and cooperation of the related parties since the application process runs in close collaboration with an applicant.
Professional indemnity cover is a type of insurance that protects professionals against claims made by clients for losses arising from errors, omissions or negligence in the performance of their professional services. It helps to cover the cost of defending against a claim and compensating the client for any financial loss they may have suffered.
Companies operating under the Security Dealers Licence are required to have a professional indemnity insurance. The amount of insurance coverage is determined by the local insurance company, depending on the specific parameters and geography of the company’s business.