GETTING THE FX TRADING LICENCE IN BULGARIA

The Bulgarian Financial Supervision Commission has been the main regulatory authority in charge of registering, maintaining stability & transparency within the non-banking financial industry in Bulgaria. This Bulgarian Financial Supervision Commission ensures the protection of consumers through legal, administrative and informational assistance.

The Republic of Bulgaria is a good place for brokers working with European regulation because since 2007 the country is part of the European Union, becoming licensed in Bulgaria allows FX brokers to operate within the European Union.

The Republic of Bulgaria has an incredibly favourable corporate tax rate of only 10%, reasonable incorporation and licensing fees and access to a highly qualified workforce for one of the lowest salaries in Europe. All this means, the country is not only part of the European Union, but it is also an active member of the Markets in Financial Instruments Directive, MiFID, the commission in charge of developing standards of good practice in the non-banking financial sector, throughout the European Union.

The regulation steps throughout the various European jurisdictions are difficult & expensive, the Markets in Financial Instruments Directive harmonizes the regulation of Bulgaria as a country with common requirement as all of the members of the EU.

The Bulgarian Financial Supervision Commission is the country’s financial regulatory entity in charge of issuing Forex licenses after examining documents & certificates, provided by companies as part of their applications for permit issuance, amending license status in the event of non-compliance, and enforcing regulation to ensure that organizations that hold an FSC license follow all rules & regulation to which they are bound. The purpose of the supervisory activity from the part of the FSC is to ensure the prevention and/or termination of any legal violation. This protects the interest of investors by ensuring the operator’s compliance of all legal requirements, but also ensuring the operators’ financial stability and that the information they provide to consumers is accurate and reliable.

GENERAL REQUIREMENTS - FX LICENSE IN BULGARIA?

Every company, who wants to operate and get licensed on the Bulgarian FX market, needs to be registered as an investment intermediary in Bulgaria and become licensed by the Bulgarian Financial Supervision Commission. This statutory body operates under the umbrella of the European MiFID. The foreign companies abide by the rules set forth by MiFID with some specific national rules.

One of this rules are concerning the capital requirements of the registered companies.  The required basic capital to get a FX license in Bulgaria is BGN about 250,000 (about 132,000 EUR) for the simple particular brokerage license, payable as follows: 25% must be deposited prior to filing of the application form and 75% must be paid within 14 days of approval.

The full FX license, receive a companies & this allows operations on Bulgarian FX market, the full license has a capital requirement of BGN 1,500,000 (000 (about 775,000 EUR). An additional payment of 1% of the capital must be made to a further guaranteed fund.

1.      The FX broker company need to have at least two executive directors,  who possess proper higher education in a field related to finance or economics, proven experience in the financial field, a clear criminal record, and they cannot be related to one another (relatives or partners in life or in another company).The both directors may be coming from foreign countries, not only local specialist could be accepted.

2.      The FX Company must have the necessary appropriate software, equipment and technology in order to successfully operate and provide service to customers, or otherwise contract such infrastructure with third party providers. The new FX company must provide the Bulgarian authority with a detailed and solid business plan including income forecast, expected P&L, etc.

3.      The FX Company must have a physical space in Bulgaria to function as an office.

4.      The process of obtaining a license through the FSC takes about 6-7 months from the moment the complete application is filed.