Pacific island nation of Vanuatu has emerged as a popular destination for forex brokerage license in the past couple years. The license allows to buy, sell and trade securities like bonds, commodities, CFDs and FX as well as portfolio management on behalf of clients. It typically takes between 4 weeks to 4 months to setup a licensed Financial Dealer in Vanuatu, depending on the agency one uses.
According to my observation, the number of companies registered with Vanuatu Financial Services commission as Financial Dealers increased by 40% in the period of 3 months, amounting to 508 licensees as of January 20, 2017.
In 2017 Vanuatu Financial Services commission published Act No. 11 Dealers in Securities (Licensing) Amendment with a series of changes made to the security dealer license in Vanuatu.
Two major changes are :
- The deposit has been increased from $1,850 to $47,000 and auditing is needed for renewal
- Application requirements were revised and now education proof, reference letters etc are required
On June 16th, 2017 Vanuatu Dealers in Securities Act was also renamed to the Financial Dealers Act. This article intends to provide summary of the changes (the act can be found following this link):
– the deposit for a Financial Dealers License application has been raised to VT 5 million and is no longer deposited with the Supreme Court but with the (Vanuatu Financial Services) Commissioner.
– If you are an existing licensee, the balance in excess of previous deposit (~4.8 VT ) is required upon application for an extension of license (application for renewal, needs to be renewed yearly).
– As to the Bond deposit, the Act No 11 now provides for withdrawal of the deposit under the following conditions:
- Request should be done in writing to the Commissioner who may instruct the Commission to withdraw the bond deposit after expiration of the license or at the request of the license holder.
- The Commissioner shall not authorize the withdrawal […] if there is information that the licensee owes investors funds and / or if the licensee has not provided an updated report of its financial activity and a list of investors to the Commissioner and the Commissioner must satisfy that there are no aggrieved investors that will be affected by the withdrawal of the bond;
- The Commissioner shall cause to publish a public notice of his intention to withdraw and pay the bond upon expiry of 90 days.
- In the event of an objection, the Commissioner shall not withdraw the bond but allow the parties to pursue their claim in court.
- In the event where a licensee is convicted of fraud and misappropriation of funds, the license will automatically be cancelled and the bond will be used to indemnify aggrieved investors.
- Another change that may impact is that a licensee is prohibited to sell or transfer a Financial Dealers License and there is a VT1,000,000 fine for anyone who contravenes this rule
