Founders ask the question in a form the answer does not fit: which licence do banks accept. Bank onboarding does not work by licence lookup. A credit institution assesses whether it can hold the relationship inside its own risk appetite, its correspondent obligations and its regulator's expectations, and it scores several things at once. The licence tells the bank who supervises you. The rest of the file tells it what will move through the account.
The four things a bank scores
The first is the supervisory quality of the licensing jurisdiction. Bank compliance teams work from internal country risk ratings built out of FATF assessments and mutual evaluation reports, tax transparency reviews, sanctions exposure and their own loss history. A licence issued in a jurisdiction with a strong evaluation record and an active enforcement history scores differently from one issued where the register is a formality. This is a ranking, not a binary, and each bank ranks slightly differently.
The second is coherence between the licence and the client base. A firm licensed in one region serving clients concentrated in another raises the obvious question of which authorisation covers those clients. If the answer is none, the bank is being asked to process the proceeds of activity that may be unauthorised in the client's home country, and that is a risk it cannot price away. This is where most offshore files fail, and it is a scope problem before it is a banking problem. Our piece on passporting myths covers why the scope question keeps arriving at the bank's desk.
The third is the money flow itself. Retail deposits arriving by card from dozens of countries and withdrawals leaving to e-wallets and crypto addresses is a very different pattern from institutional wires between two named counterparties. Banks read the pattern for chargeback exposure, third-party funding and layering risk, and they will ask for the expected volumes and corridors up front.
The fourth is the people. Ultimate beneficial owners, directors, source of wealth, adverse media, sanctions and PEP screening. A shareholder register that ends in a nominee arrangement in an opaque jurisdiction is often what actually kills an application, long after the licence has been accepted. The mechanics of that check are set out in the KYB verification guide.
How the tiers behave in practice
It helps to think in tiers rather than in names.
| Licence tier | How bank risk teams typically treat it |
|---|---|
| Major onshore investment-firm authorisation in a well-rated jurisdiction | Bankable on ordinary terms in the home market. Local bank, local currency, standard KYB. The file still fails if ownership or flows look wrong. |
| EU or UK authorisation used outside the home market | Accepted, with questions about which entity serves which clients and how cross-border scope is handled. |
| Reputable mid-tier jurisdiction with a real supervisor and public register | Workable, usually with enhanced due diligence, more documentation and a slower onboarding. |
| Registration-only or light-touch offshore status | Frequently declined by mainstream banks for a full operating account. Firms often end up on payment institution or EMI accounts instead, which are not the same thing. |
| No licence at all | Not bankable for regulated-looking activity. Presenting an unlicensed brokerage as something else is misrepresentation and ends the relationship when discovered. |
The distinction in the fourth row matters more than most founders expect. An account with an electronic money institution gives you an IBAN and payment rails, and for many firms it is a legitimate part of the stack, but it is not a bank deposit relationship and it does not carry the same protections. The difference is explained in what an EMI licence covers.
Client money is a separate question from the corporate account. Where a firm is required to segregate client funds, the segregated account has its own eligibility rules under the licensing regime, and a corporate account at an EMI will usually not satisfy them. Check the requirement with counsel in your licensing jurisdiction before you assume one account solves both problems.
What makes a file bankable
The firms that get accounts do a few unglamorous things. They present a single, consistent story: this entity holds this authorisation, serves clients in these countries, and blocks the rest at sign-up. They bring documented expected volumes and corridors instead of asking the bank to guess. They can show the AML programme, the appointed compliance officer, the transaction monitoring rules and the screening vendor, because a bank that inherits your monitoring gap owns the consequence. They disclose the ownership chain to the natural persons at the end of it without being chased. And they apply where they have substance, since a bank in a country where you have an office, staff and tax presence has a reason to want the relationship.
SINGUARD builds software for brokers and prop firms and holds no financial services licence anywhere, so none of this is us selling banking. It is what we see when clients bring the same file to five institutions and get three declines. The pattern in those declines is almost always one of the four scores above, and usually the second one.
When the answer is genuinely no
There is a version of this conversation where the honest answer is that the plan does not bank. If the entity is registered in a jurisdiction with a weak evaluation record, the clients are retail cardholders in Western Europe, the ownership runs through nominees and the product is leveraged CFDs, no amount of application polish fixes it. The route back is structural: a licence that matches the clients, an ownership chain you can show, and a jurisdiction with substance behind the address. Read banking for trading firms for the wider stack, and take your own legal advice before committing to a structure.
"Banks are not grading your licence. They are asking whether they can explain your account to their own regulator in one paragraph, and if they cannot, the answer is no whatever the certificate says."
— Alex Onta, Executive Director, SINGUARD
Key Takeaways
- There is no approved-licence list. Banks score jurisdiction quality, licence-to-client coherence, money flow and ownership together.
- A licence that cannot lawfully cover where your clients live is the most common reason a trading firm file is declined.
- An EMI account gives you rails, not a bank deposit relationship, and it rarely satisfies client-money segregation rules.
- Substance in the country where you apply, documented flows and a visible ownership chain move a file further than any certificate.
Frequently Asked Questions
Do banks refuse all offshore-licensed brokers?
There is no universal rule, and policies differ by institution. What is consistent is the mechanism: light-touch registration scores poorly on jurisdiction risk, and a mismatch between the licence and the clients' home countries is treated as unpriceable regulatory exposure.
Is an EMI account enough to run a brokerage?
It can serve as part of the payment stack, but it is a payment relationship rather than a bank deposit relationship, and it usually does not meet client-money segregation requirements where a licensing regime imposes them. Confirm the position with counsel in your licensing jurisdiction.
What single change most improves a rejected application?
Aligning the licence with the client base, then showing real substance where you are applying. Most declines trace back to a bank being unable to identify which authorisation covers the clients whose money is moving through the account.
About the Author
Alex Onta is an Executive Director at SINGUARD. He built eTrader, the terminal, the mobile apps, eTrader Broker, Copytrading, Business and Community, along with the worldwide clustered-server infrastructure it all runs on, with his brother Roman Onta helping on the design, and he leads that division today. Together with Roman he builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals, and the two of them carry worldwide compliance, payment processing and international business structuring side by side. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.