Luxembourg Brokers in Financial Instruments License_Guideline

Luxembourg Brokers in Financial Instruments License

The Law of 5 April 1993 on the financial sector, as amended, provides the legal framework for the provision of the Professionals of the Financial Sector (PSF). PSF are defend as regulated entities offering financial services apart from the receipt of deposits from the public (a function which is strictly confined to credit institutions). This industry therefore covers a very broad range of financial and even non-financial services. PSF, which are supervised by the Luxembourg regulatory authority, the Commission de Surveillance du Secteur Financier (CSSF), enjoy special access to the market in financial activities and fall within the financial sector’s specific sphere of information confidentiality and security. Brokers in Financial Instruments in categorized under the broad category of Investment firms of the PSF.

Permitted Activities

As per the Act, Financial instrument brokers shall be professionals engaged in the business of accepting and transmitting, on behalf of clients, orders relating to one or more financial instruments without holding any clients funds or financial instruments. Such activity shall also include bringing together two or more parties thereby bringing about a transaction between those parties. The following are the permitted activities:

  1. Reception and transmission of orders in relation to one or more financial instruments
  2. Execution of orders on behalf of clients
  3. Dealing on own account
  4. Portfolio management
  5. Investment advice
  6. Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis
  7. Placing of financial instruments without a firm commitment basis
  8. Operation of Multilateral Trading Facility (MTF)

Legal Requirements

Sr.

No

 Element Requirement(s)
Entity Requirements The entity making the application is Luxembourg:

  1. Common Fund (FCP)
  2. Investment Company-variable capital (SICAV)
  3. Investment Company-fixed capital (SICAF)
  4. Limited Partnership
Director’s Requirements The licensee will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction.
Shareholder requirements The applicant will need at least one shareholder.
Local Office
  • The applicant must prove effectively that they conduct business in Luxembourg.
  • The Broker therefore must demonstrate the existence in Luxembourg of the central administrative office in accordance with CSSF circular 95/120 or 12/552 and of its registered offices
Auditor The auditor must be a registered company auditor with appropriate professional experience.
Professional indemnity insurance
  • The applicant must have indemnity insurance coverage of €1,000,000 per claim and €1,500,000 per year.
  • The Broker’s annual accounts must effectively be entrusted to an auditor with such experience and any change to the approved auditor must be justified and authorized beforehand by the CSSF.
Minimum Capital Requirements The minimum capital requirement for the Broker is €50,000.

Ongoing Obligations

  1. Broker are subject to the accounting principles set forth by the modified law of 19 December 2002 (title II, chapters II and IV) for the annual accounts and by the modified law of 10 August 1915 (section XVI) on commercial companies, for consolidated accounts. The annual accounts must give a true and fair view of the assets, the liabilities and the income statement of the PSF. Furthermore, the presentation of the balance sheet and the income statement may not change from one year to the next.
  2. Brokers are required to submit financial information to CSSF as per circular 05/187 as amended and supplemented by CSSF circular 10/433 on a monthly basis, the deadline being the 20th of the next month.
  3. Brokers must maintain their professional indemnity insurance cover of €1,000,000 per claim and €1,500,000 per year.

About Valsen Fiduciaries

Valsen Fiduciaries is a licensed independent global service provider of a broad range of fiduciary, administrative, legal, corporate secretarial and support services.

    1. Company formations and Administration
    2. Assistance with Bank Account opening
    3. Collective Investment Setup and Administration
    4. Intellectual Property Registrations and Maintenance.
    5. Trusts and Foundations setup and administration
    6. Online Payment Gateway Solutions
    7. Banking Licenses and PSP, E-Money, E- Wallet Licenses
    8. Yacht and aircraft registrations.
    9. Cryptocurrency Solutions (ICO, STO, Crypto Exchanges etc)

The Valsen Advantage

  • We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances. We have extensive knowledge of a wide range of securities dealer licenses in all major jurisdictions.
  • Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
  • We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
  • We have a full in-house compliance support for all compliance requirements with the regulator and service providers

Our Contact Details

Please visit us on: www.offshorelicense-regulatory.com , www.valsen-corporate.com

OR Contact us on:

  • Tel: +248 4321018
  • WhatsApp: +248 2525217
  • Skype: vf-international.com
  • Email: [email protected]

Telephone:

+248 252 5217

[email protected]

vf-international.com