Establishing a Securities Dealer in Seychelles in 2024
Engaging in activities related to capital markets, collective investments, insurance and fiduciary services in the jurisdiction of Seychelles requires the prior authorization from the Seychelles Financial Services Authority (FSA). Beyond licensing the authority is mandated with the supervision of persons engaged in the provision of such activities. In this respect the primary objective of the FSA is to enhance and expand Seychelles’ non-bank financial services sector by implementing a robust regulatory and supervisory framework.
Throughout this article, the SALVUS Investment Firms Licensing team elaborates on the advantages and requirements of obtaining a securities dealer license in Seychelles. The article addresses the following questions:
1. Why establish a business in Seychelles?
2. What is the regulatory framework for dealing in securities?
3. License Categories and Capital Requirements
4. How SALVUS can support your Securities Dealer application
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1. Why establishing a business in Seychelles?
The decision to establish a business in Seychelles comes with several compelling reasons. With a strategically positioned time zone, Seychelles facilitates business transactions spanning four continents within a single day. This advantageous location offers closer proximity and broader access for entities seeking to expand into African markets.
Seychelles boasts a skilled and well-educated workforce, with English as the official language. This linguistic advantage streamlines communication for international companies looking to establish their presence in the region. Furthermore, the favorable tax regime provides preferential rates for licensees meeting substantial activity requirements.
Within this conducive environment, engaging in dealings or advising on securities is facilitated by a modern and adaptable legal framework governing securities. The jurisdiction’s low initial capital requirements and affordable fees for business incorporation and licensing, coupled with enhanced privacy and asset protection ensured by corporate laws, make Seychelles an emerging international financial center.
2. What is the regulatory framework for dealing in securities?
The regulatory framework for dealing in securities in Seychelles is established through the Securities Act, which provides a robust and comprehensive structure for market participants involved in securities transactions. This legislation encompasses all aspects that investment dealers and investment advisors need to address during the application process and outlines the conduct of securities business.
In conjunction with the Securities Act, the FSA Seychelles has issued several regulations to complement and further clarify various aspects, including:
- Forms and Fees Regulation: stipulates the application fees required upon the submission of the application form. It outlines the costs associated with due diligence procedures conducted by the FSA to thoroughly review each application.
- Advertisements Regulation: provides guidance on the prohibitions or requirements related to the issuance of advertisements by authorized persons in the securities market.
- Conduct of Business Regulation: elaborates on specific instances concerning the conduct of business. It addresses aspects such as inducements, fair and clear communication, clients’ understanding of risk, client agreements, client rights, and suitability.
- Financial Statements Regulation: outlines the specifics for maintaining adequate, complete, and up-to-date accounting records. It also establishes minimum issued and paid-up capital requirements to ensure the financial stability of entities engaged in securities transactions.
These regulations collectively create a comprehensive and well-defined framework that ensures transparency, fairness, and the proper functioning of the securities market in Seychelles.
3. License Categories and Capital Requirements
The FSA Seychelles authorizes distinct license categories, each prescribing a specific set of business activities. Specifically related to securities services, the pivotal license categories are the Securities Dealer and Investment Advisor. The delineation of business activities for these two categories is outlined in the table below.
| License Category | Securities business | Capital Requirements |
|---|---|---|
| Securities Dealer | Acting as principal or agent by way of business: • Makes offers to make an agreement with another person to enter into or offer to enter into an agreement, for or with a view to acquiring, disposing of, subscribing for or underwriting securities or in any wat effects or causes to effect a securities transaction; • Causes any sale or disposition of or other dealing or any solicitations in respect of securities for valuable consideration, whether the terms or payment be on margin, instalment or otherwise or any attempt to do any of the foregoing; • Participates in any transaction in a security occurring upon a securities exchange; • Receives under an order to buy or sell a security which is executed; • Manages a portfolio of securities for another person on terms under which that person may hold property of the other person. | Minimum issued and paid-up capital of 50,000 USD |
| Investment Advisor | Carrying on business of giving advice on securities by way of business: • Advises other persons concerning investment in securities; • Issues, analyses or reports concerning specific securities; or • Manages a portfolio of securities for another person: - without holding property of the other person; and - on terms that preclude him from doing so. | Minimum issued and paid-up capital of 25,000 USD |
In this context, the term ‘securities’ encompasses a broad spectrum, including shares, debt instruments, and derivatives such as futures, options, forwards, contracts for differences (CFDs), and swaps. These instruments extend to stocks, bonds, metals, commodities, and currencies, incorporating even cryptocurrency.
4. How SALVUS can support your Securities Dealer application?
The SALVUS Investment Firms Licensing team employs an advanced project management methodology, meticulously overseeing each licensing project. Leveraging our extensive experience collaborating with the Seychelles Financial Services Authority, we adeptly gather relevant information to meticulously prepare all required documentation, ensuring a comprehensive and well-supported application. Additionally, we provide guidance to our clients on optimizing their financial resources by strategically selecting in-house staff, outsourcing arrangements, and engaging third-party service providers.
Drawing from our experience, we have found that the licensing process with the Seychelles FSA can typically be concluded within a span of 3 months. However, this duration is contingent upon the completeness and quality of the provided information, along with the applicant’s ability to present a well-defined business plan and vision. To account for potential variations in the Seychelles FSA’s workload, response times, and any additional information requests, we recommend our clients budget for a timeframe of 4 to 6 months to ensure a thorough and successful completion of the licensing process.
If you are interested in obtaining a Securities Dealer or Investment Advisor license in Seychelles, contact us at info@salvusfunds.com or call us at +357 7000 7898.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.