What is a broker specialization area?
Brokerage activity includes providing services to individuals who want to trade in the financial market (traders). The broker is an intermediary between traders and the exchange. He is needed for individuals because they do not have the right to trade in the currencies markets.
Traders who conclude a contract with a broker can expect to receive one or several services from the following list:
- The broker becomes the guarantor (underwriter) of the transactions.
- The broker is responsible for the maintenance of trade finance documentation.
- The broker conducts trade on the client’s guarantee in different resources, including securities, raw materials, currency.
- The broker is responsible for getting financial security guarantee, that is, leverage. This service is especially relevant for clients who are going to take part in lots with large amounts.
The task of a broker is to attract as many traders as possible because his income depends on the number of transactions and trade amounts. But to start brokerage activities, you need to register first. Our company will help to pass the registration procedure.
Stages of registration
Those who have decided to try themselves as a broker can pt for 3 available brokerage options to choose from:
- Start a local subsidiary that has been already operating in the home and foreign markets of the brokerage company.
- Fulfill your potential as a sub-broker – become an intermediary between a licensed brokerage firm and clients.
- Start your own business.
The last option is the most reliable and profitable. By starting his firm, a broker could become self-employed. This is the way to go solo without constant control from the brokerage company that provides the right to open a subsidiary or to sign a sub-broker agreement. Having started your own business, you also don’t have to share your profit.
But at the same time, this method is difficult because the procedure for starting a brokerage business consists of many stages:
- registration of a legal entity in a prescribed form;
- opening a bank account;
- search for suitable premises and a lease agreement signing;
- registration as a member of a self-regulatory organization;
- hiring qualified employees.
It is also necessary to provide evidence of the presence of the authorized share capital. Only in this case, it is allowed to issue a license, which makes it possible to carry out brokerage activities. Its size differs depending on the place of registration.
License application
According to the law, the brokerage must be licensed. It is prohibited to make transactions on the exchange, the subject of which are securities, currency, or other similar financial items. It is prohibited without appropriate permission.
Licenses are obtained by the National Commission. To set up a claim to licensing of the brokerage activities, the broker should prepare the following documents:
- Application.
- A document on the authorized share capital, indicating the availability of the required sum.
- Office lease agreement (or title documents if the brokerage activities will take place in the premise owned by the broker).
- Confirmation of the presence in the office of equipment and communications necessary for customer service: telephones, a copy machine, computer, and server technique, Internet connection.
- Qualification documents of hired workers, indicating that they have the necessary skills and certification.
- Rules on service provision that the broker frames with the help of our specialists.
- A sample of the contract that would be concluded with future traders.
Registration of documents with the “Volta-Tech” assistance allows you to speed up the registration process significantly. Our experience will help you to do away with (or even prevent) all possible difficulties on the way to obtaining a brokerage license.
Office and staff leasing
According to the standards, the area of the office where traders will get brokerage services should not be less than 20 m2. If the additional structural divisions (subsidiaries) are opened, then the area of each of these commercial premises should be 10 m2 and more. The office needs to be arranged with all the equipment necessary for work.
The presence of the staff is also a critical aspect of brokerage activities. You need to find reliable and certified team members even before submitting a request for a license. The broker should have at least 2-3 employees on staff, including managers. But it would be ideal to lease 5-6 workers. If new subsidiaries are opened, at least two employees should be hired for each of the newly-opened departments. Moreover, each of the leased employees must have enough qualification.
Thorough attention is paid to individuals applying for senior positions in your company, especially when it comes to executives of the subsidiaries. In addition to their high-level qualifications, they should:
- not be on the staff of other companies operating on the stock markets;
- have at least 3 years of experience in the financial market with more than 1 year in the manager (senior) position.
We are ready to help you overcome difficulties and find excellent specialists for vacant positions.
Only an employee with the following competencies should be leased for the position of general accounting executor in a brokerage organization:
- Diploma of higher education. It can be a specialty or master’s degree.
- Graduation diploma that proves the fact of qualification course completion. These are prof courses that include professional training for accountants as stock market participants. The certificate proves the fact that the potential general accounting executor is attested. It is allowed to take courses within 3 months from the date of taking up the position of an accountant. Further, the general accounting executor is obliged to improve his qualifications with regularity 1 time in 3 years.
- The candidate for this position is not restricted from accounting activities and holding the position of an accountant or senior accountant.
- There is no conviction for articles related to crimes against property (asset stripping, discreditable practices, etc.).
- Work experience should be at least 2 years if the previous employer was a financial institution or 5 years – in a company carrying out other activities.
It is not easy to find an accountant with the designated competencies. Also, the salary of professionals is appropriate. Therefore, many brokers outsource their accounting activities.
Purchase of a trading platform, CRM installation, Back office organization
For a successful business, it is not enough just to get a license. It is also necessary to set up the trading platform, CRM, and Back-Office. Our software combines these three systems at once. This way the stability of each digital constituent is achieved. At the same time, other software available on the modern market cannot provide these opportunities.
Find out more about the capabilities and advantages of our software products can be found in the section “Trading platform” or “CRM and Back-Office”.
***
Despite the complexity of registration and preparation for the business launch, the brokerage is considered an attractive line of activity. The main reason is profitability – the company begins to receive the net income just in 2-3 months of work. During this time, the costs spent on the business setting up are paid off.
