List of Brokers with VFSC Regulation
The Vanuatu Financial Services Commission (VFSC) is the main regulatory body in Vanuatu responsible for the regulation and oversight of financial businesses there. Founded in 1993, the VFSC registration fee is relatively cheap thus allowing forex brokers to offer low trading costs.
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Vanuatu Financial Services Commission (VFSC), previously known as Registrar of Companies and the Official Receivership Department of the Treasury, was established in December 1993 after Vanuatu Parliament enacted the Vanuatu Financial Services Commission Act No. 35 of 1993. Their job is to operate an effective and efficient Registry, and regulate and supervise the financial services industry of Vanuatu. They also have the responsibility to promote the industry outside of the country, as well as protect its reputation from undesirable business persons.
Since the license given by VFSC allows brokers to run their business in a flexible manner, trading in a VSFC-regulated broker means no limit on leverage. Traders could choose to trade with 1:1000 leverage or more. There are also no restrictions on bonuses or rebates.
VFSC brokers are also known for affordable trading fees. Traders could enjoy small deposits, low spreads and commissions, as well as 0% fees on deposits and withdrawals.
On the downside, the regulator does not require negative balance protection or operate an investor compensation scheme. VFSC does not require its brokers to report their financial activities and company performances, so there is no strict supervision from the regulator to ensure the compliance of its members.
- Go to the official website of VFSC.
- On the Registry Services, choose Companies then click on Register Search.
- Type the broker's name in the available field, then click Search.
- If the broker is registered in VFSC, the result should appear like this. You can click on the broker's name to see more detail.
- The following is an example of how a broker's information is displayed in more detail.
Since the VFSC brokerage license is relatively easy to obtain and the regulator doesn't do much in applying restrictions for clients' protection, the trading safety of VFSC forex brokers is not as strong as other brokers regulated by top financial authorities. To minimize the risk, traders could look for these aspects in a VFSC-regulated broker:
- Additional licenses from other financial regulators, preferably from more credible institutions such as MFSA, CySEC, ASIC, or even FCA.
- Established in no less than 5 years.
- Good reputation among traders with minimum negative testimonials.
Despite its reputation for providing lenient regulations, VFSC is still one of the most favored offshore regulations among forex brokers. Setting up a business is a quite difficult task to perform, so anything that might ease that task will surely draw the attention of business owners.
Here is a list of what Vanuatu might offer in that regard:
VFSC allows brokers to set up their business with a minimum capital of $2,000. To put that into perspective, the FCA (UK) requires two types of capital to be paid depending on the granted permission: €125,000 and €750,000. So, quite a huge difference there.
- Quick and Simple Set-up
VFSC can issue a business license in just about 3 months. In comparison, the Cyprus Securities and Exchange Commission (CySEC) takes about a year to give a brokerage license. To apply for a brokerage license by VFSC, brokers only need to provide a business and financial plan, supervisory and AML/CTF Manuals, as well as a confirmation of their geographic and marketing targets. Also, the people involved in the business are required to submit these:
- Resume or CV regarding experience in forex brokerage activities.
- Notarized copies of passport.
- Proof of residential address.
- Original bank reference.
- A clean criminal record.
- Non-bankruptcy certificate.
- High Flexibility
The regulatory standards and reputation of the VFSC might not be as stringent as those of more established financial regulatory bodies in other countries. As such, brokers are free to offer high leverage, utilize bonus promotions as a marketing scheme, and provide act as a money management service.
- No Physical Presence Required
Some other regulatory bodies require brokerage companies to set up a physical presence in their country. Even an offshore regulatory body like IFSC Belize requires its brokers to do so. On the other hand, VFSC only needs the incorporation and administration of a Vanuatu international company.
Along with the Reserve Bank of Vanuatu, VFSC is responsible to enact legislation and supervisory activities on the following subjects:
- Anti-Money Laundering and Counter-Terrorism Financing
- Business Names Act
- Company and Trust Services Providers
- Charitable Associations (Incorporation)
- Credit Unions
- Dealers In Securities (Licensing)
- Electronic Transactions
- Financial Institutions
- International Banking
- International Companies
- Mutual Funds
- Offshore Limited Partnerships
- and many others.
Continue Reading at What Does VFSC Regulation Mean for Forex Brokers?
Registering a license in VFSC is a truly simple process, implemented with low requirements for setup, where investor only needs to submit a register online, prove an initial capital fund of mere $2,000, pay some fees, and within a 2-3 month, the firm is licensed and registered as a legal forex brokerage.
The VFSC regulator does not demand any proof of company backgrounds, nor check the implementation of secure fund management or basic operation guidelines. They do not demand any regular reporting and never impose fines in case of fraud.
Continue Reading at 3 FSC Forex Regulations That You Should Know
Online trading in Nigeria is currently unregulated, while offline forex trading is well-regulated. This regulatory contrast is due to the differences like these two markets.
Continue Reading at Is It Safe to Trade Forex in Nigeria?
The first official effort to regulate the industry began in 2004 through the establishment of Federal Financial Markets Service (FFMS/FSFR). After the agency's disbandment in 2013, the Central Bank of Russia took over supervising Russian forex brokers.
In 2015, the Central Bank of Russia launched far stricter law enforcement. Forex brokers were given a January 2016 deadline to obtain licenses from CBR, or abstain from carrying out their services in the region. Since then, CBR only granted licenses to a handful of brokers.
Continue Reading at Best Forex Brokers in Russia
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