RETAIL e-FX PROVIDER
“Nevertheless, as bookkeepers, the accountants will In Cyprus, MAP S.Platis is a specialised consultancy
probably be used by applicant firms to generate cash firm supporting the EU financial services sector. Dr.
Platis notes: “In fact, we are the only firm, to date,projections – for a fee – for their clients,” Brown
that has succeeded in obtaining licenses for retailcontinues. “The larger accountancy firms are believed
FX brokers and market makers in Cyprus since theto have been seen as too expensive to even warrant
implementation of the MiFID. Globally, and in otherenquiries being made.There are not known to be
EU states, this industry is segmented where suchmany other firms in the UK that have openly offered
services are being usually offered by a number of legalthe necessary advice and consultancy services; the UK
firms and even accounting fi rms.”MoneyTransfer Association, of which some hundreds
of relevant firms are members, has had links with the Increasing oversight?
CCL Partnership, which firm has been able to assist a
number of applicant firms,” notes Brown. As to what ways current efforts by regulatory
authorities could increase oversight within the retail
FX market’s impact on current forex licensing,Timeline for licensing
compliance processes and procedures in parts ofOn the factors that may influence the timelines
the world, Dr. Platis says: “Our view, overall, is thatinvolved in achieving compliance with regulatory
the FX business can only grow fast and sustainablyrequirements, Dr. Platis states that the licensing process
through the necessary and globally-consistentis, in itself, the first step in the compliance process. He
legislation. We, as a specialised advisory firm in thesays the entire application route is a process with which
field, strongly believe that the sector can only benefitthe applicant will need to demonstrate their ability
from an improved global regulatory environment.to operate under the relevant and applicable fi nancial
“This will create a level playing field for the existinglaws, related to the license, supported by the presence of
regulated retail FX business, and, most importantlyspecific processes and procedures.
boost retail investors’ confidence in the sector. At the
same time it needs to be stressed that it remains aTimelines, in this respect, can vary from jurisdiction
rather difficult task to accomplish, mainly due to theto jurisdiction, ranging from three months to more
technology involved in the business, which makesthan a year, depending also on the consultant and
regulatory oversight more complicated, as well as thethe size and complication of the applicant’s business
presence, still, of jurisdictions where this activity is not
model. “For example, taking our case, we have had adequately regulated.”
MiFID licenses given by EU regulated authorities as
fast as within three months from when the application However, Duperouzel notes: “The primary danger
has been submitted, and also as late as seven months,” at the moment from regulators in the Asian region is
Dr. Platis comments. the possibility that any new rules will add to the cost
of doing business without a corresponding regulatory
benefit. Broadly, we are seeing a reversion to moreLicensing the only way forward
localised rule-making, than alignment with rules issuedBenefits of compliance are great.The obvious
by either the SEC or the FSA in the UK,” he continues.benefit of gaining a license is the ability to market
“Given the significant corporate failures in both the USto prospective and existing clientele as a regulated
and the UK over the last two years, it is understandableand licensed firm. But in this, the jurisdiction plays
that Asian regulators are less likely to adopt all SEC ora significant role, as this determines the level of
FSA proposals, but it is also a form of protectionismadequacy of the company’s systems and controls which
to create new local rules and that protectionism willrelate to investors’ protection. Dr. Platis says this is
ultimately harm growth and recovery.also one of the reasons why Cyprus is increasingly
receiving so much attention from the sector. “Having said that, the US, UK and European
regulators need to get their heads out of the sand as“Having said this, however, I will go a step further
well, and think more globally about harmonisationand say that my view is that the future of the business
of rules across borders. Current politics, however,belongs to the regulated and licensed fi rms. Given
suggests that nobody should hold their breath in that
the fierce competition out there, investors demand respect, and this will mean that when you are running
and are being offered increasingly the level of comfort a global operation there are going to be more local
that only a duly licensed firm can offer. So, in reality, quirks in the regulatory framework that need to be
operating without license is no longer a long term addressed in order to keep licenses in tact in far off
strategy or, indeed a, viable option,” adds Dr. Platis. locations,” sums up Duperouzel.
|134 april 2010 e -FOREX
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