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How to start your own brokerage

Congratulations! You’ve decided to start your own brokerage. Perhaps you’ve heard about the massive amounts of money to be made and want to jump in on the action or perhaps it has been your longtime dream to own a financial brokerage. Whatever the reason might be, you have decided to open a Forex brokerage and are on the path to entrepreneurship heaven (or hell, depending on how well you plan your strategy). As an expert in the field of brokerage start-ups and having assisted brokerages across the globe in successfully launching their own Forex brokerage, we’ve summarized the steps you’ll need to follow in order to start your own brokerage and undertake trading bliss:

  1. Research: Do your homework and determine what your target market will be. Forex licensing and regulation requirements are determined by the specific country in which you will be actively seeking traders.
  2. Gather initial capital. As a Forex brokerage, you’ll have two types of expenses, operating and trading expenses. In some locales, a minimum capital requirement has already been codified for Forex businesses who are either based locally, or who are actively seeking clients living in the jurisdiction. Regardless of capital requirements set by jurisdictions, a brokerage should plan to have significant funds set aside to cover ongoing costs during the first couple of months of operations. Operating funds and trading funds must be segregated.
  3. Before you even open your brokerage, you need to incorporate. Once you are incorporated, you’ll need to become a licensed and registered broker.  Some locations, such as Cyprus, Belize, the British Virgin Islands, the Cayman Islands, Jersey, Luxembourg, and Panama, cater to newly incorporated brokerages. Cyprus is extremely popular since registering there, provides brokerages access to clients residing in any of the countries belonging to the European Union.
  4. Set up contracts with Payment Service Providers. It is advisable to have more than one PSP available in the event your primary PSP shuts you down, you’ll have a backup one already in place.
  5. Set up your office: This includes things like your physical space requirements (real estate, phone lines, electric, internet, etc), evaluating, acquiring and setting up a trading platform, choosing your strategy (A Book or B Book), creating a website and collateral, hiring staff, designing an administrative system, creating a sales strategy, etc.
  6. Training and testing: Once you are set up, it’s time for training and testing. Test your platform and train your sales team before you go live. Launch your initial marketing campaigns and start trading with a small group of clients as a test.
  7. Show Time: Once you feel confident in your systems and your staff, move forward with your full-scale marketing campaigns to acquire clients. Once you begin the client acquisition process, assess the development of your lead generation, conversion and retention efforts, monitor your profitability and look for growth opportunities, including a new mix of products

Yael Warman

Yael Warman

Yael Warman is a creative writer with a strong background in marketing and advertising. Yael has been a writer for over 10 years and has worked for clients in various industries as well as her own companies and is currently the Content Manager at Leverate.