Seychelles has positioned itself as an attractive jurisdiction for international financial services due to its business-friendly regulatory environment, tax efficiency, and strategic location. The country has developed a comprehensive legal and regulatory framework that supports a wide range of financial services, including securities trading, fund management, and offshore banking.

The licensing and supervision of financial services in Seychelles is entrusted with the Financial Services Authority (“FSA”). FSA of Seychelles is recognized for its balanced regulatory approach, which emphasizes both investor protection and the promotion of a competitive financial services industry. The FSA is known for its commitment to transparency and adherence to international standards, including those set by the International Organization of Securities Commissions (IOSCO). Its regulatory regime is seen as both robust and adaptable, which has contributed to Seychelles’ growing reputation as a credible and stable financial hub.

If you seek to act as a broker or market maker and offer services with regards to securities and derivatives, a Securities Dealer’s license is what you need.

The Securities Dealer Framework

In Seychelles, the licensing and supervision of Securities Dealer’s is under the responsibility of the FSA under the Securities Act, 2007.

The Securities Dealer’s license allows the holder to trade in securities either as a principal (for their own account) or as an agent (on behalf of clients).

Main Requirements of a Securities Dealer

The general requirements for obtaining a Securities Dealer license in Seychelles include:

• Capital Requirements: The minimum capital requirement to operate a Securities Dealer stands at USD 50,000. The FSA is free to impose a higher capital requirement if the intended activities are deemed riskier.
• Operational Infrastructure: The FSA requires that applicants demonstrate adequate physical and technical infrastructure, including office premises, IT systems, and compliance frameworks.
• Qualified Personnel: Key personnel must possess relevant qualifications and experience in financial services, and at least two directors must be resident in Seychelles.
• Compliance and AML/CFT: Applicants must have robust AML/CFT policies in place, along with a detailed compliance framework tailored to the activities of the license.
• Business Plan: A comprehensive business plan must be submitted, outlining the proposed activities, target market, risk management strategies, and financial projections.
• Professional Indemnity Insurance – Every Securities Dealer licensee must arrange for an appropriate professional indemnity insurance.

Timelines for Application and Licensing

The typical timeline for preparing an application and obtaining a license from the FSA includes:

• Preparation: It usually takes 2-3 months to compile all necessary documents, draft required submissions, and complete the application process.
• Regulatory Review: The FSA typically takes 3-4 months to review and process an application, although this timeline can vary depending on the complexity of the application and the need for any additional information.
• Total Timeline: The entire process, from preparation to licensing, generally takes between 5 to 7 months.

Comparison to other jurisdictions

In comparison to jurisdictions such as the Cayman Islands, the British Virgin Islands and the Bahamas, Seychelles is a lenient and affordable jurisdiction, without compromising on the quality of its regulatory framework and professional services providers. Indeed, the costs of professional services in the Cayman Islands, the British Virgin Islands and the Bahamas are much higher than in Seychelles. This means that both set up costs and ongoing operational expenses in any of these three jurisdictions will be significantly higher than in Seychelles.

Furthermore, the capital requirements in these three jurisdictions pose a significant entry barrier to those seeking to set up their operations there. The capital requirement in the Cayman Islands ($100,000 KYD, approx.$120,000 USD), the Bahamas ($300,000 USD) and the British Virgin Islands ($1M USD) are high enough to deter many.

Seychelles also allows a straightforward and lenient regulatory framework when it comes to trading, as there are no trading limitations such as leverage limitations in Seychelles. In contrast, the Money Broking license in Labuan, Malaysia’s special economic zone, impose several limitations such as the possibility to offer trading on FX products only (no shares, indices or commodities) and a maximum leverage ratio of 1:100.

Conclusion

Seychelles offers a well-structured regulatory framework for Securities Dealers, with a range of license categories tailored to different business models and scopes of activity. The Financial Services Authority is highly regarded for its effective regulatory oversight and its role in fostering a competitive financial services sector. For businesses looking to operate within a reputable jurisdiction, Seychelles presents an attractive option due to its regulatory environment and growing stature as a financial hub.

Other solutions in Seychelles

Seychelles recently enacted a bill to license and regulate Virtual Assets Services Providers (VASPs), aligning itself with leading offshore financial centers such as the Cayman Islands and Bermuda, and more recently, Mauritius. The regulatory framework for VASPs in Seychelles will be in place soon following the enactment of implementing rules and regulations.

Should you require further details or assistance with setting up your Securities Dealer or VASP operation in Seychelles, or unsure if Seychelles can cater your planned activities, please do not hesitate to contact us.

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