What does it take to set up a spreadbetting firm?

[fxtraderanalyst]

Hi there,
I was wondering what it would take to set up a spreadbetting firm, in terms of capital outlay, legal issues, and so on. How hard is it? I'd like your input on this. Thanks for your time.

 

[glyder]

Hi there,
I was wondering what it would take to set up a spreadbetting firm, in terms of capital outlay, legal issues, and so on. How hard is it? I'd like your input on this. Thanks for your time.

Barriers to entry are high for new regulated financial firms.At a guess I'd say If you're not a financial business already its gonna be a pretty major undertaking...things to consider are
Capital requirements - I imagine(completely guess) no less than £500K (this is separate from set up and running costs).
FSA authorisation,client money protection/insurance, qualified staff, hedging costs, premises & systems, marketing and ongoing requirements to be met... there's a lot to it.
Once you have all that lot together its not too complex business to monitor and run...depending on the calibre of your staff & systems.
The alternative is a white label of an existing operation. This reduces the initial effort a lot but also the returns, but then if you aren't in the market already with a good reputation why would a firm agree to offer it?>

 

[Skill Leverage]

the guys who came up with shortsandlongs.com are on T2W in the spread betting forum, they're probably a good place to start.

 

[fxtraderanalyst]

thanks you two...yeah..i would think it will be a major undertaking..what about the likelyhood of success once you got it all togehter? (I guess it depends on how you market your firm)...I would think the house always wins..in the long run, that is. Thanks..