What is a CySEC License and why is it important?

A CySEC license is one of the most recognized forex licenses to get, depending on your structure, whether you are an established brokerage, a forex IB, or a white label. Not just for the safety, it offers to the traders, but also for your financial structures, top organizational setups, the EU passport, and the opportunities it opens up for future development. So let’s find out what exactly a CySEC License is, and why it is important to have one.

What is a Cysec License?

CySEC or the Cyprus Securities Exchange Commission is an independent regulatory authority of Cyprus for the financial industry that issues CySEC licenses. Launched initially in 2001 as a public legal entity, it controls investment services, and transactions in transferable securities carried out in Cyprus. CySEC licenses are distributed to allow investment and brokerage firms to operate in the stock, forex, and CFD market.

Whether you are an already established brokerage, a forex IB or white label, a CySEC license is one of the most reputable forex licenses you would definitely like to have. It provides protection to traders, has suitable banking structures, helps maintain top organizational setups, and opens the door to many opportunities in the future. It is ideal to have a full license. Still, there may be more options to consider that allow for manageable operational costs and a viable future, always considering your current setup.

When Cyprus became an EU member state in 2004, all regulations and operations of CySEC had to comply with the terms of the European financial regulatory framework. In simpler terms, it means that CySEC operates under the branch of European regulators advocating for secure trading. It connects with European regulations that are responsible for maintaining transparency across the European Union financial markets. These European regulations are the Markets in Financial Instruments Directive (MiFID) and The Markets in Financial Instruments Regulation (MiFIR).

How do you get a CySEC License?

Once you have made up your mind that you want to enter the European market, you will need to appoint an application promoter for your CySEC License. Do not forget to discuss all options and decide on the type of license most suitable for your business model. The two primary business models relate to either your brokerage being the intermediary (Straight Through Process to a Liquidity Provider – STP) or your brokerage “making the market,” being itself the liquidity provider and deciding on the risk accordingly. In either of the two models, you will be asked for a set of investment and ancillary services from CySEC for authorization, accompanied by information on the Company, its Directors, and its UBO(s).

After the above-mentioned decision-making process comes four significant tasks that you will have to undertake to get a CySEC License:

  • Do an internal assessment to verify the viability of the project. Here you need to specify the source of funds that will be used as capital and the people who will effectively direct the business.
  • Complete the application form and submit it, get necessary documentation, respond to inquiries from the regulator and provide additional documentation if and when required.
  • Register and incorporate a new business enterprise for the CIF. 
  • Activate your license after authorization is granted. Setup office, hire key employees, finalize technology and pass the final CySEC inspection.

List of Documents required for CySEC License Application

The CySEC license application requires the following documents:

  • Recent application form ( completed) as provided by the CySEC 
  • Certificates stating you have a registered office in Cyprus
  • Clean criminal records and certificates of good standing of the shareholders with special participation, the Board of Directors and employees of the Company
  • Proof of existence and origin of funds to be used as capital
  • Company legal documents like certificate of incorporation, Memorandum, and Articles of Association
  • Certificates provided by the Republic of Cyprus confirming the directors and secretary of the Company
  • Information about the directors, managerial staff, and shareholders including CVs, completed forms/questionnaires, academic qualifications, statements of honor)
  • Group structure
  • Organizational structure
  • Company policies bundle for best execution practices, conflicts of interest, and governance 

With the above documents, one needs to have a three-year business plan, the internal procedures/operations manual (IPM or IOM), and anti-money-laundering (AML). Also, know-your-client (KYC) procedures must also be filed in the application.

Wondering what the CySEC license cost is? Head to the official website of CySEC to know the current charges for the CYSEC license.

Significance of a CySEC License

The CySEC license plays an essential role as it helps prevent money laundering and any wrongdoing in the market. People can rely on the companies having a CySEC license as companies regulated by CySEC guarantee protection and safety for investors and traders. CySEC monitors brokerage companies’ actions and transactions closely to ensure that they comply with the directives of the legal and regulatory framework.

Besides being a strong regulatory body, a CySEC license is essential because it ensures transparency and fairness. A CySEC license helps CySEC regulated brokers maintain fairness and transparency. If brokers with a CySEC license fail to operate honestly, the regulatory body can impose penalties and sanctions on them, putting them at risk of losing the license. The broker also needs to submit periodic financial reports to the CySEC regulator to prove full transparency of its actions. It helps in ensuring that only fair and honest brokers can get a CySEC license.


If you’ve decided to become a trader and enter the European market, the most relevant option for you is a CySEC regulated broker having a CySEC license because it will protect your interests on the highest level. Before you sign up with a brokerage, always check if it is one of the approved CySEC brokers.

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Get in touch with us. 

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