Cyprus Investment Firms: FOREX

Foreign exchange trading (FOREX) is an innovative type of business that brings together buyers and sellers from all over the world regardless of time and place. In other words, sellers and buyers conduct foreign exchange transactions immediately. Cyprus is considered to be an attractive location for the FOREX market. The attractive regulatory and taxation schemes together with the low operation cost and high quality financial, accounting and legal services motivate international FOREX firms to install their business activities in Cyprus. In addition, the Cyprus legislation is harmonised with EU Directives as Cyprus is a full member of the European Union. Precisely, as an EU member-state, Cyprus is fully harmonised with the EU Market in Financial Instrument Directive.

Nevertheless, it should be underlined that a FOREX firm needs to be authorised by the Cyprus Securities and Exchange Commission (CySEC) in order to be able to launch its business activities and offer its services in Cyprus. FOREX firms belong to the category of Cyprus Investment Firms. As a result, FOREX firms must comply with the regulations of Law 144(I)/2007.

Application Procedure:
A primary requirement is that the Applicant must be a Cyprus Company, with particularly drafted Memorandum and Articles of Association. In addition, the Company must be headquartered in Cyprus.

Criteria for granting a license:
1.Submit all corporate documents, such as incorporation certificate, certificate of directors/ secretary, shareholders, Memorandum and Articles of Associations, etc., together with the Cyprus Investment Firm Application Form (Form 144-03-01).
2.Submit a three-year business plan, internal procedures manual and, anti-money laundering and know your clients (KYC) procedures.
3.CySEC will decide within six months after the reception of the application and supporting documents.

Main Requirements:
•The Memorandum of the Company must state clearly the nature of its business activities.
•The Applicant must fulfill the minimum capital requirements.
•At least one director is a permanent resident of the Republic of Cyprus and fits CySEC’s criteria, i.e. directors must be individuals of good reputation and sufficiently experienced.
•The company needs to have an office in Cyprus.
•The company is obliged to develop internal control mechanisms, procedures and policies.
•CySEC must be satisfied that the company has internal procedures in order to avoid a potential conflict of interest with its clients.

I.Application fee : According to the provisions of Part I of Directive DI144-2007-04 of 2011 and Directive DI144-2007-04A of 2012, the Applicant must pay the relevant fee.
The payable charge is 3.000 euros increased by:
a.1.000 euros per investment service of paragraph 1, 5 and 7 of Part I, Annex III of the Law;
b.1.500 euros per investment service of paragraph 2 and 4 of Part I, Annex III of the Law;
c.2.000 euros per investment service/activity of paragraph 3 and 6 of Part I, Annex III of the Law;
d.10.000 euros for the investment activity 8 of Part I, Annex III, of the Law;
e.500 euros per ancillary service of Part II of Annex III of the Law;

II.Reporting and Compliance Requirements: Finally, it should be pointed out that investment firms licensed by CySEC have an ongoing reporting duty to CySEC. Furthermore, they are obliged to comply with Anti-Money Laundering regulations and develop “Know Your Client” procedures.

Forex market participant

Unlike the equity market – where investors often trade with institutional investors (such as mutual funds)or other individual investors there are additional participants that trade on the forex market for entirely different reasons than those on the equity market. Therefore, it is important to identify and understand the functions and motivations of these man players of the forex market.

Arguably, the most influential participants involved in the forex market are the central bank and federal governments. In most countries, the central bank is an extension of the government and conducts it policy in line with the government. However, some government feel that a more independent central bank is more effective in balancing the goals of managing inflation and keeping interest rates low, which usually increases economic growth. No matter the degree of independence that a central bank may have, government representatives usually have regular meetings with the central bank representatives to discuss monetary policy.
Central banks are often involved in manipulating reserve volumes in order to meet certain economic goals. For example, ever since pegging it currency (the Yuan) to the U.S dollar, China has been buying up millions of dollar worth of U.S treasury bills in order to keep the Yuan at its target foreign exchange rate (forex rate) central banks use the foreign exchange market to adjust their reserve volumes. With extremely deep packets, they yield significant influence on the currency market.

Along with central banks and governments, some of the largest participants involved with forex transactions are banks. Most people who needed foreign currency for small –scale transactions, like money for traveling, deal with neighborhood banks. However, individual transactions pale in comparison to the dollars that are traded between banks, better known as the interbank market. Banks make currency transactions with each other on electronic brokering system that a based on credit. Only banks that have credit relationships with each other can engage in transaction. The larger banks tend to have more credit relationships, which allow those banks to receive better foreign exchange prices. The smaller the bank, the fewer credit relationships it has and the lower the priority it has on the pricing scale.
Banks, in general, acts as dealers in the sense that they are willing to buy/sell a currency at the bid/ask price. One way that banks make money on the on the forex market is by exchanging currency at a higher price than they paid to obtain it. Since the forex market is a worldwide market, it is common to see different banks with slightly different exchange rates for the same currency.

Some of the biggest clients of these banks are international business. Whether a business is selling to an international client or buying from an international supplier, it will inevitably need to deal with the volatility of fluctuating currencies. Having to deal with forex risk is a big problem to many multinational corporations. Since foreign exchange is uncertainty.
One choice that a business can make to reduce the uncertainty of foreign –exchange risk is to go the spot market and make a transaction for the foreign currency that they need. Unfortunately, businesses may not have enough cash on hand to make such transactions in the spot market or may not want to hold large amount of foreign currency for long periods of time. Therefore, businesses quite often employ hedging strategies in order to lock in a specific exchange rate for the future, or to simply remove all forex risks for a transaction. Example is a European company wants to by steal from U.S. it would have to pay for steal in U.S. dollars. If the price of the Euro falls against the dollars before the transaction is made, the European company will finally pay more Euro than formally specified. As such, the European company could go into the market to lock in the current exchange rate to eliminate the risk of dealing in U.S. dollars. These contracts could be either forwards or future, contract.

Other class of participants in forex are speculators. Instead of hedging against changes in exchange rates or exchanging currency to fund international transactions, speculators attempt to make money by taking advantage of fluctuating exchange –rate levels.
The largest and most controversial speculators on the forex market are hedge funds, which are essentially unregulated funds that use unconventional and often risky investment strategies to make very large returns. Think of them as mutual funds on steroids.
Given that they can take large positions, they can have a major effect on a countries currency and economy. Some critics blame hedge funds for the Asian currency crises of the late 1990s, while others pointed on Asian central bankers. Either way, speculators can have a huge impact on the forex market.

These are the basic participants of the forex market, now you can understand the history and knowledge of the forex market.

Financing Your Investments – Creative Ideas

For many years, the way to finance real estate was to make a 20% down payment, and get a loan for the remaining 80%. Of course you could make a higher down payment, but 20% was typically the minimum. Luckily, this standard has changed. There are now several finance options available to the real estate investor, including seller-financing.

Another popular way to finance your purchase is to have a second mortgage. The buyer makes a 5% down payment, and borrows the remaining 15%, usually at a higher interest rate, on a different loan.

Even though it’s nice to invest less on a property, the higher interest rate isn’t the
only drawback. Usually, if the buyer does not meet the 20% minimum, they are required to get costly private mortgage insurance (PMI).

For creative investors, other financing sources exist. Manufacturers of homes in planned developments are often willing to provide financing to early buyers.

Another risky and somewhat complicated way of financing a property is called ‘sub2’, which stands for ‘subject-to’. This type of deal is when the seller gives you the deed to the property, the loan stays in place, but the buyer never legally takes over the loan, just the payments. There are many different versions of this kind of transaction. Because of the complexity and risk, this method of funding an
investment is not recommended for beginners.

You can also consider forming a limited partnership (LP) to finance your real estate investment. There are many different arrangements for this method. Some types involve each person in the partnership contributing in a portion of the cost,
usually 50% each. However, sometimes the profit is distributed relative to the original amount invested. Another arrangement is that one half of the partnership contributes the capital, and the other half provides the needed services, such as repairs on a home that needs to be fixed. There are many different variations of
this method.

Government loans are available to low income investors, or buyers who have served in the military. These programs are usually only available for primary residences.

Did you ever think about buying a home on a credit card? This is another method of financing your real estate purchase, although it’s usually not recommended. Obviously, the interest rates on most credit cards are substantially higher than loan rates. Another drawback is that lenders determine your creditworthiness based on your outstanding debt, and if you use credit card cash advances to cover the 5-20% down payment that you need, you’ll probably get turned down for a loan.

Have you considered asking the seller to become your lender? This method has many benefits, mainly more flexibility in the structure and terms of the loan and in the FICO scores accepted. There are companies who are in the business of buying these private loans at a discount.

How Can Investors Get Funding for Major Real Estate Investment Properties?

Real estate investment can be very rewarding but also very challenging. By forming a group of investors, you will be able to get over the hurdles of real estate a lot easier. A group of investors will help each other achieve success over major money players. An investment group will purchase a property, say a multi-family property, and allow for other single investors to go in on the purchase, hence forming an investment group. Usually, individuals seeking an investment group are wanting to get higher up on the real estate ladder and turn their investment into a business.

Different Loan Types for Investment Groups:

Multifamily Loans: Multifamily loans are there for investment groups to seek investment on apartments, condos, student housing, senior house, RV parks, and town homes. To invest in a multifamily unit, you need the time, experience, and dedication. If you are a single investor and you just don’t have the time for this big of an investment property, you may consider joining an investment group to help with the whole picture. The investment group will find the best resources to create the ideal financial scenario.

Commercial Loans: Commercial loans are eligible loans for Offices buildings, retail store space, warehouses, flagged hotels, credit tenant, light industrial, professional centers, medical/dental office, self-storage, office condominiums, and strip shopping center. If you are interested in a commercial loan mortgage through an investment group, you will not be disappointed. They can help collectively manage all the units, taking care of maintenance and advertising.

Bridge and Hard Money Loans: Are offered to all real estate investors once they are interviewed. There are many situations for wanting this loan like Traditional acquisitions, Acquisitions with rehab competent, Construction acquisitions near completion Refinances with fresh equity, Properties in lease-up, Repositioning loans, Opportunity loans. Our risk evaluation and terms for your transaction will be based on the quality of credit, value of the collateral, the experience of the borrower, and exit strategy.

An investment group is a good way to get started into the real estate investment world. The quality of an investment group depends entirely on the company offering it.

Forex Arbitrage Strategies

The modern Internet is full of tempting offers about easy earnings in the Forex market – it is enough just to guess correctly the direction of the market movement and comfortable existence is provided. However, statistics is also well known, which suggests that more than 80% of Forex traders lose their money. This is due to the fact that, contrary to advertising promises, financial markets are almost impossible to predict. But not everything is so sad, there are trading strategies that are not based on predicting the direction of future market movements, but on other principles. An example of such strategies are forex arbitrage strategies based on the extraction of profit from the price difference for the same financial instruments presented on different exchanges. As a result, these strategies allow you to earn in any market movement and do not require the trader ungrateful work on guessing the direction of the movements of financial instruments.

Let’s discuss in more detail what the essence of arbitration is. The main idea of these strategies is to take two (or more) identical or linked assets traded on different sites, and when the price on one exchange becomes more than another, then make an arbitration deal: to sell the asset where it is more expensive, And buy where it is cheaper. When the prices on the stock exchanges are equal, then it is necessary to perform a reverse operation and close the positions. As a result, each arbitrage transaction will yield a guaranteed profit, independent of the market movement.

The strategy described is known as the classical two-legged arbitration. But in some cases, particularly forex, it is more advantageous to use one-legged arbitrage, in which transactions are carried out only on the side of one broker, which is “led” in relation to the second broker. In those cases when the quotes of one of the brokers are late relative to the second, the profit from the arbitrage deals will accumulate on the side of the lagging one, so there is no point in opening the opposite transactions on the second broker.

Consider what options exist for implementing arbitrage strategies on Forex. First, the most famous option is arbitrage of exchange rates. In this case, usually only one-legged arbitration is used, because the situation when the quotes of one broker is late relative to another is not uncommon in forex trading. Secondly, a wide range of options is provided by the option of arbitration between CFD-contracts traded in Forex and stock exchange instruments. In particular, you can use quotes from the stock exchange as a leading source and trade only CFD-contracts. Thirdly, it is possible to arrange arbitration between futures, for example, from the CME futures market, and CFD-contracts for the underlying assets underlying these futures traded in Forex.

In conclusion, we note that modern trading is characterized by the highest degree of competition among bidders. The trader who has not only the best trading strategy, but the best software wins. Arbitrage trade is a high-tech way of earning, which requires a special program – a trading robot capable of performing simultaneous operations on various trading floors. As an example of such a robot can lead Megatrader, which works with forex as well as with the stock market and can implement almost any arbitrage strategy.

A Beginners Guide to Investing

One of the key strategies towards becoming rich is an investment. Well, it is true that many billionaires across the globe were not born rich. It is through investments that they were able to acquire their wealth.

We might be talking about investments day in day out, but do we really understand what an investment is? Well, investing is the act of placing capital in an expectation of deriving profit or income from it.

When you make a decision of joining the community of investors, there are many factors that you need to consider. Besides where you would invest in and the amount of money to put in it, you need to make a choice on the type of investment. There are two main types of investments, these include:

Types of investments

There are two main types of investments that one can venture into. These investments are categorized in accordance with the time frame used to achieve results. They include long-term investments and short-term investments

Long-term investments

Long-term investments focus on the future. These are investments that provide continuous and reliable profits for the retirement years in future. This type of investment helps one to get little but well-distributed profits over a long period of time.

Longterm investments involve lesser risks along the way and hence termed as safe. The risks are minimal because of the but steady pace that the investment moves in.

Long-term investment requires a lot of patience. This is because the profits will not be acquired immediately. If you are in dire need of finances due to emergencies, then long-term investments should not be your option.

Short-term investments

Just like the name goes, short-term investments are investments done over a short period of time. These are plans that have a great possibility of growth and rise in value over a very short period of time. The time period of getting profitable returns ranges from only a few weeks to a few months.

Unlike long-term investments, short-term investments allow for more personal control. This is because you will be the only one to keep an eye on your money. At some point, you might be faced with economic challenges, but this will only be outwitted by the risk management mechanisms you put in place.

As an emphasis, NEVER begin an investment without deciding on what type of investment you are venturing in. the above-mentioned types should help you come up with a proper decision.

Before you start any investment, be it long-term or short-term, there are things that you ought to consider. Some of the important things to consider are discussed below.

Important things to consider before starting an investment.

1. Come up with your own financial roadmap

What is a financial roadmap? Well, a financial roadmap is a critical analysis of your own financial position. It is good to take a look at your own situation financially and make an honest decision. This is the time that you need to come up with a financial plan.

Drawing financial plans means that you ought to come up with your goals and a critical analysis of some risks that may be involved. If you are not sure of how to do this, it is appropriate that you seek help from a financial professional.

2. Evaluate your comfort zone in taking risk

A risk is anything that may impair a business or an investment from achieving its goal. And for sure, all investments may involve some degree of risk.

What you have to understand is that an investment is a speculative risk. It has a possibility of either profit or loss. It is therefore important that you understand this before making any major step.

But if you really want to invest, be ready to take up the risk. The reward of taking up a risk is the possibility of getting a greater investment in return. Greater risk risks mean greater profits, think about it.

3. Type of investment

Deciding on the type of investment is very essential. This will help you decide on the number of resources to put into the investment. You can either decide to go for a long-term or a short-term investment.

If you need the money within a very short period of time, then it is advisable that you go for short-term investments. But if your focus is in the future, long-term investments will be appropriate for you.

4. Eliminate bad personal spending habits

If you want to be a successful investor, then your bad spending habits should be stopped. Whatever you were spending unreasonably should be directed towards investing, how to start investing should be a question to professionals if you do not know how.

Investments need sacrifice, sometimes you might need to eliminate the present luxuries to enjoy better ones in future. So do not feel bad if you are forced to do away with your poor personal spending habits.

One important thing is that the proceeds you get from your investment should be handled properly. They can be returned back to the project so as to get more out of it.

After you are aware of the things to consider before you start investing, you can now start investments. Not many people know how to start an investment, but count yourself lucky as we are going to help you.

Ways on how to start investing

1. Raise the funds

An investment can never start without initial or starting capital. There are many ways with which you can raise the funds, these include: Saving over a period of time, getting funds from relatives and friends or borrowing from a financial institution like the bank.

It doesn’t matter which method you use, all you need to ensure is that the funds are available.

2. Decide on what to invest in

You cannot an investment in everything. This, therefore, means that you need to single out a particular area that your investment will focus on. Should it be in clothing, food, soft drinks or transport?

There are many areas that you can invest in, it only calls for a critical analysis of the customer location.

3. Investment location

After deciding on the kind of investment you will venture in, the next step is to decide on the location. You can decide to have a brick and mortar or online location. This is if your investment deals with products and services.

4. Come up with a management plan

After you have set up your investment, come up with a management plan. A management plan will help you know how to deal with your finances and your resources.

The above are some of the simple steps, or guidelines on how to start an investment. If you want to start an investment, then consider following them.

The Importance Of Setting Trading Targets In Forex Trading

Even the most seasoned of traders can never guarantee with certainty the direction of a market. They can always place predictions on the market. However, to be successful in the long run, the effort has to be from the traders’ end, who figure out different methods of forex trading in different market scenarios and overcome the various hurdles.

The key to making the best returns out of a position is to stay in the market as far as one can and not a moment longer. Traders should always develop the discipline and set targets for their forex trading activity before entering a competitive market like Sri Lanka.

What should be the trading goals that a trader operates with?

Goal 1: Traders should never trade with money that they cannot afford to lose. This is vital to ensure that they do not go bankrupt after a few online trading losses. They should always start with a corpus that can be afforded to be lost while trading.

Goal 2: Setting realistic profit targets should be paramount. Traders should be clear on what they intend to accomplish with their trading account and how they intend to go about it.

Goal 3: Traders should also be clear about the trading volumes they are going to engage in the market every day. They should ensure that at any time only a fraction of their account is exposed to the forex trading market.

Goal 4: Traders should hold a detailed documentation of their trading activity and ensure that every tiny detail of it is carefully scrutinized. This helps traders discern patterns in their trade activity.

Goal 5: It is important for traders to stay on the side of the market momentum and ensure that they derive the maximum gain from it. To accomplish the same, they will have to look out for the trends meticulously and know how a market may sway.

Setting goals while online trading is the hallmark of a seasoned trader. For novice traders, bringing this aspect into their trading routine is highly vital as it aids in long-term success in competitive markets. They can also approach reputed forex brokers in Sri Lanka like WesternFX for the right guidance in developing these attributes.

Using a Leading Indicators Example for Trades and Investments

There are different ways to get your move in the market. If you want to get the edge on your next trade or investment, then you want to look at different strategies and tools. New systems are now available to assist you with your next decisions. A leading indicators example is one of the alternatives that you can look at. There are different approaches you can use to reduce risk and gain security while on the market.

In the past, a leading indicators example was used by analysis and determinations of traders and investors. Sensing and intuiting what would happen was commonly used by those who understood the changes in the market. Others would combine oscillators, quantitative analysis and other calculative approaches. These provided determinations based on past patterns within the stock market. When adding this up for trades and investments, there was the ability to change the next move for profitability.

Today, the leading indicators example has expanded to other alternatives. You will find technological applications that extend the range of options for traders and investors. The approach used includes algorithms, complex mathematical formulas and scientific theories for different leading indicators. When these add up and combine data, it provides a different approach to the market. As a result, there is the ability to see what is happening before it happens.

The leading indicators example is divided by the different aspects a trader or investor wants to look at. You will find options with trends, specifically which lets you know the next move in the market. If you are a day trader or want to see specific changes with twists and turns in the market, this will guide you to information. It is also possible to use leading indicators for pivot points, specifically which offers proprietary methods to determine the changes over an intermediate term. With these combined solutions, you will find trading signals for every type of trade or investment.

Change the way you approach your strategies for your portfolio. With a leading indicators example, you will be able to make better decisions with your trades and investments. There are specific tools that are available, all which allow you to find the best way to approach your portfolio moves. By sensing the twists and turns in the market, you will easily be able to gain confidence and accuracy in your trades and investments.