brokerage help needed

[miike]

Hi All,

I am looking into starting a brokerage company in Australia.
My basic understanding of requirements follow:

1 - Australian Brokerage License.
2 - International Brokerage License.
3 - Finance (By Bank).
4 - Platform Software.
5 - Servers/Hosting.

Can anyone help me with any advice to look into the first 3 steps. I am unsure as to where to start my investigations.

Cheers,
miike

[akula]

Hi All,

I am looking into starting a brokerage company in Australia.
My basic understanding of requirements follow:

1 - Australian Brokerage License.
2 - International Brokerage License.
3 - Finance (By Bank).
4 - Platform Software.
5 - Servers/Hosting.

Can anyone help me with any advice to look into the first 3 steps. I am unsure as to where to start my investigations.

Cheers,
miike

Sure, I'm in Sydney. I can answer your questions. I'm PS146 compliant, I work in the industry and I have an Australian law degree.

First of all, what do you want to broker?
(i.e. second hand cars, managed funds, real estate, corporate debt?)

[miike]

Hi Akula,

I am interested in starting up a forex trading brokerage company.

i.e www.forexct.com.au

However, I have some ideas that puts me ahead of the market in Australia and brings functionality that is not currently available in Australia.

I am interested in what I would need to investigate in order to setup a company of this nature.

i.e licenses, financial backing (as a broker it would be the banks money at risk, we just control the trades).

Any help is much appreciated.

Cheers,

miike

[akula]

ok...this is how it works in Australia

1. Take these 2 forex brokers ozforex.com.au and forex.easy-forex.com.au as examples to see how what I'm saying to you works in practice

2. look at their sites. In the footer of the site you'll find things like "Regulated in Australia by ASIC (AFS Licence number 226 484)" and "Under the Corporations Act 2001, a retail client must receive a Product Disclosure Statement (�PDS�) from a financial services licensee before acquiring a financial product."

3. This means that if you wanna offer a regulated financial service in Australia (i.e. FOREX brokerage), you need to have an Australian Financial Services license from ASIC, and if you don't have one, you must work as a lisensee for someone who does.

4. To buy this AFS from ASIC you have to meet a whole bunch of criteria including record keeping procedures, a certain amount of money in the bank, dispute resolution options, independent directors, an audit committee etc etc etc. The whole process of acquiring the license will cost 100k+...not too mention the expense of keeping it. It's a very difficult and expensive license to acquire and to keep

5. Once you have the license, if you wanna offer a financial service/product to your customers, you have to issue them with a Financial Services Guide (FSG) and a Product Disclosure Statement (PDS). You can't offer a financial service if you do not make these documents registered with ASIC and available to your customers.

6. So...if you still wanna be a broker but don't wanna get an AFS, or register a new PDS with ASIC - you can still do that. The method is for you to become an authorized representative for a company that holds an AFS. Essentially, this means you become an agent for someone like ozforex.com.au. Not everyone can become an authorised representative.

7. To become an authorized representative, you have to get PS 146 compliance from an education provider like FINSIA. This means you have to pass a number of exams, and then - for the purposes of law, you will be competent enough to for a license holder and give advice about FOREX.

Now....I can think of a couple of ways for how you can still offer FOREX services without having to have an AFS, or having to become PS 146 compliant - but points 1-7 basically set out how the law works in Australia

Questions/comments?

[akula]

Hi Akula,

I am interested in starting up a forex trading brokerage company.

i.e www.forexct.com.au

However, I have some ideas that puts me ahead of the market in Australia and brings functionality that is not currently available in Australia.

I am interested in what I would need to investigate in order to setup a company of this nature.

i.e licenses, financial backing (as a broker it would be the banks money at risk, we just control the trades).

Any help is much appreciated.

Cheers,

miike

PS.

So have a look..

1. go to http://www.forexct.com.au/
They offer a PDS

2. The PDS identifies who operates the site - it's Forex Capital Trading Pty Ltd

3. To see if Forex Capital Trading Pty Ltd has a license, you got to the ASIC register..and yes, they do...the license number is 306400

So...if you wanna do FOREX, like they do, you can either get your own AFS license or become a PS 146 compliant, authorized rep for Forex Capital Trading Pty Ltd...or their competitor

Make sense?

[crackah]

I'm PS146 compliant,

Quick q, where did you get it?

[miike]

Thanks for the quick replies.

Makes sense. Am just finding it hard to find this kind of information.

All I need now is a business partner that has cash and wants to do all the work. haha.

Thanks for the help,

much appreciated.

[akula]

Quick q, where did you get it?

I did mine at UTS. I was doing a business degree and I needed to pick a major. We had financial planning on offer, which happened to be on the asic register for both ps146 tier 1 and tier 2

so it was a choice of that or finance....

[akula]

Thanks for the quick replies.

Makes sense. Am just finding it hard to find this kind of information.

All I need now is a business partner that has cash and wants to do all the work. haha.

Thanks for the help,

much appreciated.

no worries..so your three steps

1. Find a traing provider for forex on the asic register

2. do this course, finish it in 6 weeks and get a job with a forex broker....actually, you can start working for a broker now, and just do admin tasks which don't require you to be compliant

3. once you've had experience and training, you can start your own business as a FOREX advisor, with your own office etc...and just work under the license of some company. if you still want to, you can then register your own AFS and employ your own authorized reps

[ForexCT]

Hi Miike,

We like your enthusiasm and would like to offer you a job at Forex Capital Trading Pty Ltd.

Please e-mail your resume to us.

Regards

[crackah]

LOL.... okay...

[richkid]

I got half way through my PS146 training before I got offered my current job and had to quit. I was hoping to become a stock broker. It's a pretty simple course.