The Seychelles regulator has made a series of huge changes over the last month, many of which will impact CFD brokers licensed as securities dealers.
After being approved by the National Assembly last month and going ‘live’ at the start of this year, the Financial Services Authority (FSA) in the island has now given notice to firms that they will have until mid-2026 to comply.
There are quite a lot of changes involved here, some more significant than others. Some that are more likely to impact brokers include…
- Doubling of paid up capital to $100k
The capital requirement for brokers has now doubled to $100k. This is up from $50k previously. Brokers must also hold that amount consistently and it must either be in a local bank approved by the regulator or in one abroad that is recognised by the regulator. - Risk warning mandate
The regulator has also introduced a risk warning for the first time. This is not as extreme as in the UK or European Union, meaning brokers do not have to put client loss statistics.
However, the warning must be prominent and in bold text and contained within a ‘box’. Most significantly, it has to be fixed on screen, whether on mobile or desktop, so that someone scrolling through the site can see the risk warning at all times. - Advertising restrictions
The other key point is that brokers must now tell the regulator where they are or plan on doing business.
A significant point here is that if companies are doing business in a country where it would potentially require regulatory approval, they must show the regulator that they have approval from the local regulator to do so.
This is something St Vincent and the Grenadines required as well, although it’s unclear to what extent it has actually been enforced. - Fee changes
The least impactful – but still noteworthy – change is on fees. These seem less targeted at the CFD broker industry than the other rule changes, as they have gone up across the board for FSA licensees.
The main one to be aware of here is that the annual fee has doubled from $3,000 to $6,000. In addition there are now a number of new application and name change fees. For example, adding a domain name to your license will cost an $500 for the application and then an additional $1,000, per domain name, on an annual basis.