A guide to setting up a retail brokerage in The Seychelles

A Guide to Setting Up a Brokerage in The Seychelles

The Seychelles is an archipelago of 115 islands in the Indian Ocean, 1,500 miles off the East African coast, with the capital Victoria, on Mahe island, having a tiny population of only 27,000 people. The total population of the Seychelles is just 100,000. Although the authorities in the Seychelles do not provide a definitive list of brokers set up in the territory (with this type of secrecy being one of the attractions to brokers setting up here), it is estimated that there are between 300-400 retail brokers registered in The Seychelles. Why are there so many brokers registered here? One of the main drivers is the ability of brokers to circumvent leverage restrictions imposed in major regulatory jurisdictions. On top of that, the Seychelles FSA have attractive minimum capital requirements for firms setting up business in the territory making it the attractive choice for many brokers looking to compete with their peers on leverage.

Since the introduction of MiFID II in 2018, stricter leverage limits were introduced for European forex brokers offering services to retail clients. Default leverage was reduced from 100:1 to 30:1 on major currency pairs. Leverage on minor pairs and gold was reduced to 20:1. This clampdown was mirrored by other regulators worldwide, including ASIC in Australia, the US (NFA), the UK (FCA), Canada (IIROC), Hong Kong, Singapore and New Zealand.

One broker we spoke with who is currently in the process of setting up in the Seychelles, Andrey Stoychev, an experienced FX, CFDs and Digital Assets manager, stated that, “Basically The Seychelles is a FX and CFD friendly environment but also a strictly regulated territory. On one hand you can start totally to legally to offer your services, can have a normal bank account for your operations and on the other hand clients can be sure that their broker treats them