From Prop Firm to Regulated Broker: Your 7-Step Activation Roadmap

Transitioning from a proprietary trading firm to a regulated broker requires careful planning, strategic structuring, and comprehensive compliance frameworks. This 7-step roadmap guides you through the entire activation process.

The 7-Step Roadmap

1. Select Jurisdiction & License

2. Structure Entity & Ownership

3. Banking & PSP Onboarding

4. Operational Substance

5. Technology Stack

6. Marketing Compliance

7. Global Launch

Select the Right Jurisdiction & License Type

Choose a regulatory jurisdiction that aligns with your business goals. Options range from Tier-1 jurisdictions like Cyprus, UK, and Dubai to emerging hubs like Mauritius and Seychelles.

Key Selection Factors

Cost of licensing and compliance

Processing time and efficiency

Permitted leverage conditions

Client segmentation rules

Market access & passporting

Structure Your Entity & Ownership Legally

Proper corporate structuring is critical for regulatory approval and operational efficiency.

Operating Structure: Decide on same-jurisdiction operation or holding-company model

Beneficial Ownership: Clearly define UBOs—avoid opaque nominee layers

Key Personnel: Appoint Compliance Officer/MLRO and Finance Director

Governance: Establish board, maintain registers and meeting minutes

Capital: Meet minimum share capital requirements locally

Banking & PSP Onboarding

With regulated status, you gain access to payment service providers (PSPs), electronic money institutions (EMIs), and crypto gateways.

Documentation Package Required

Prepare thorough documentation including business model description, compliance proof, financial projections, and AML/KYC policies to satisfy banks and PSPs during onboarding.

Operational Substance & Staffing

Demonstrate real physical operations to satisfy regulatory substance requirements:

Hire staff in key roles (compliance, back office, finance)

Lease office space in the licensing jurisdiction

Generate local expenses for economic substance

Maintain local decision-making and control

Technology Stack

Transition from prop trading systems to broker-grade infrastructure:

KYC/AML Systems: Robust client verification and monitoring

Trading Platforms: MT5, cTrader with full audit trails

Surveillance Tools: Real-time trade monitoring and reporting

Payment Integration: PSP connections and LP relationships

Recordkeeping: Comprehensive data retention capabilities

Regulatory & Marketing Compliance

All client-facing materials must meet regulatory standards:

Review marketing for each target region

Include risk disclosures and license numbers

Define affiliate and IB program agreements

Implement compliant communication procedures

Client Acquisition & Global Launch

Execute your market entry strategy:

Identify legally serviceable markets

Launch multilingual marketing campaigns

Partner with reputable affiliate networks

Implement ongoing monitoring and optimization