SCB | Financial Regulator of Bahamas

Description and functions of the SCB

The SCB, an independent regulator of the Bahamas, is subordinate to the country’s Ministry of Finance and responsible for overseeing securities, investing, and all exchange and over-the-counter (OTC) markets, including Forex. Obtaining an SCB license is mandatory to operate in the Bahamas.

SCB’s mission and objectives in the Forex market:

• Develop rules for the interaction between all market participants and approve standards for brokers and investment funds;

• Promote the growth of the exchange and OTC markets. Improve the jurisdiction’s attractiveness in the international financial community;

• Advise private investors on their rights, resources, and risks in the exchange and OTC markets;

• Investigate breaches.

The SCB’s leverage over offenders lies in fines and the revocation of licenses.

SCB’s mission and objectives in the Forex market:

• Possess the minimum capital of 300,000 USD and keep it at least at that level after obtaining a license;

• Have a physical office in the Bahamas;

• Provide a business plan and disclose the risk minimization system.

The Bahamas is an attractive jurisdiction offering optimized taxation and money flows. That is why the SCB is called an offshore regulator that makes concessions to its licensees. Entities are not required to fully disclose information, interact with self-regulatory organizations, or go through independent audits. However, the SCB aims to operate in the international financial market and therefore part of the requirements was recently toughened and brought in line with European norms. Despite its status as an offshore regulator, the Commission can be called international.

Official website and available information

The SCB website is well-structured. The section with a list of licensees and the complaint filing section are available right on the homepage. The website also features documents, laws, and norms that regulate the interaction of legal entities and private individuals. Much of the content is in pdf format.

Overview of the website:

• Main and auxiliary menus at the top. The auxiliary menu offers links to the complaint filing section, contact details, “About Us”, and the Commission’s social media profiles.


• Information part with the latest news and investor alerts and notices.


• Footer with useful links to other Bahamas authorities that can help resolve disputes.

Traders are primarily interested in the section with licensees’ details and the complaint submission section. It is also worth looking through the information section sometimes, as the Commission can inform investors about possible violations by brokers or potential risks.

SCB’s mission and objectives in the Forex market:

Lists of licensees on the Commission’s website are provided in pdf format and therefore you cannot find brokers by using the search box on the homepage. General information about companies (mentions in the news or releases) cannot be accessed that way either.

The three letters in a broker’s license number designate the group in which the company should be searched.

To confirm a broker’s license on the SCB website, do the following:

• 1

  Open the broker’s website and make sure the company has an SCB license. In most cases, such information is in the footer along with the company’s legal name. The license number can also be in “About Us”.


• 2

  In the footer of the Commission’s website, select “Registrant Licensee Status Search”.


• 3

  Select the group of registrants according to the license number. In this case, it is the SIA group.


• 4

  On the pdf list, look for the broker by its legal name.

The license number is not included, but the broker’s presence on the Commission’s list confirms that the license is active. Here you can also find the company’s address, category, P.O. box, and other details.

SCB’s basic requirements for brokers

On average, it takes the Commission 4-6 weeks to make a decision about granting a license.

Compared to European regulators, the SCB has mild requirements for license acquisition. But operation conditions have become harder. As a member of several international regulatory communities, the Commission imposes restrictions on brokers in order to fully inform investors about their rights and limit potential investor risks.

SCB license | Pros and cons

The Bahamas is interesting for brokers primarily due to the possibility of minimizing tax expenses and avoiding the disclosure of money turnover. The SCB has relatively lenient requirements for license acquisition, but at the same time, it adjusts brokers’ operations to European business standards and strictly enforces them. That is why an SCB license is trusted more than licenses from classic offshore regulators, but there is still some risk of brokers’ insecurity.

European traders should cooperate with brokers that, besides an SCB license, also have a license from an authority that covers the whole eurozone. For example, the German BaFin or the British FCA (Financial Conduct Authority).

SCB’s jurisdiction

An SCB license is only valid in the Bahamas. SCB-licensed brokers can render services to non-residents if the laws of their countries are not violated. In other countries, an SCB license is not accepted. For example, to access the U.S. exchange market, a broker has to open its representative office in this country and obtain a license from a U.S. regulator. In Forex, an SCB license is usually sufficient to conclude agreements with liquidity providers.

Submission and consideration of complaints

The SCB accepts all types of complaints. Those that are out of the Commission’s responsibility are forwarded to competent agencies. The SCB asks complainants to provide as concrete and reasoned information as possible and leave all contact details.

Complaint submission procedure:

• 1

  You can approach the Commission if you believe the broker has violated your rights. The SCB considers all complaints without exception;


• 2

  If the broker has problems, you will be warned about them. Based on the results of audits, the Commission’s website publishes information about breaches and possible consequences.

SCB-licensed brokers | How to check on a broker

Every month, TU analysts look through regulators’ websites and update information on the TU website. In this section, you can find:

• All valid licenses held by brokers and their branch offices in different countries;

• Types of services permitted by licenses;

• Information about administrative penalties and warnings to brokers.

With TU, you always have the necessary information at hand!

Reviews of the SCB by complaining investors and traders

Roman, head of analytics department | St. Petersburg

I’d like to add something to the analyst’s conclusion. The SCB was and still is an offshore regulator. But unlike the agencies in Vanuatu and other offshore zones, the SCB chose to slightly adapt to some Europe standards so that both brokers and traders would trust it more.

First, ESMA (European Securities and Markets Authority) implemented new standards that significantly restricted the supply of some products in Europe. The new standards had an even bigger impact on risk reduction mechanisms, such as limits on leverage and bonuses. Before that, beginners used bonuses thoughtlessly without understanding how to repay them and increased the sizes of trades through leverage without understanding what pip value is.

ESMA reduced the risks, thereby taking away part of brokers’ competitive advantages. Most of the brokers immediately moved to the Bahamas and for good reason:

• Offshore regulators are not trusted much. They simply don’t investigate complaints and don’t have leverage over offenders. You can’t find examples of their help;

• The Bahamas has an effective legal system. Low taxes and strict oversight are balanced.

Tourism is the country’s primary income source. That is why both sides benefited from that situation. The Bahamas profited from the growth of online trading volume. Brokers have a regulator that is less meticulous than European agencies, but more reputable than offshore ones.

The SCB’s strength is the balance between opportunities and risks. The Commission controls brokers strictly and considers complaints. The regulatory system works leniently, but effectively. It has its pros and cons. In any case, the SCB is a good alternative to CySEC (Cyprus Securities and Exchange Commission). The Bahamian regulator actually protects traders’ interests.

Igor, cryptocurrency trader | Chelyabinsk, Russia

Regulators’ websites interest me because they publish information about investigations and warn you about possible fraud. It doesn’t matter which broker it is. The very facts of violations are interesting. You can find out how brokers go around the law, what methods they use to deceive investors, how these breaches are revealed, and what fines are imposed.

Vadin, trader | Kaluga, Russia

People mistakenly think of the SCB as an offshore regulator like those in Seychelles, New Zealand, or Vanuatu. By the quality of operation and real help, I would compare it to Cyprus, Australia, and Malta.

Ruslan, trader, Ukraine

I know several types of effective regulatory systems:

• A system of private regulators and auditors. For example, the SEC (Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority) in the USA. There are several regulators and private auditors in the country, so brokers are under constant cross-control;

• A system of the regulator’s local representatives. For example, the Investment Industry Regulatory Organization of Canada (IIROC). This regulator has agents in every province, where they supervise each company individually. Corruption there is out of the question;

• Strict centralization. For example, the Monetary Authority of Singapore (MAS). The regulator monitors a broker’s account activity and can suspend its operation or conduct unscheduled inspections.

These options are inconvenient for brokers, as many companies won’t disclose information about themselves.

The SCB doesn’t have centralization, audits, or account segregation requirements. Unlike Seychelles or Belize, the Bahamas accept and considers your complaints. But the chances of getting real help are low.

Andrey, trader | Izhevsk, Russia

I agree with the previous comment and think that a regulatory system cannot be full-fledged without self-regulatory organizations (SROs). Regulators cannot oversee all aspects of each entity’s operation. Also, they don’t have full access to brokers’ bank accounts or internal clearing systems.

I imagine a solution like this:

• Best brokers unite into an SRO, which obtains the right to function as a regulator;

• If a trader has a complaint, he approaches the SRO. The brokers investigate the complaint together. The guilty broker may be expelled from the SRO;

• If the SRO cannot resolve the issue or the trader isn’t satisfied, the complaint is filed with the jurisdiction’s regulator.

As a result, the regulator is not overloaded with traders’ problems, as the SRO deals with them. The brokers won’t violate investor rights because traders trust the SRO and will not trust the broker that got expelled. The regulator supervises the SRO.

About the author of this review

Oleg Tkachenko, author and analyst at TU

Oleg Tkachenko has been TU’s financial analyst and economic observer since 2016. During this time, he has prepared more than 100 reviews of financial companies and analytic articles on technical and fundamental analysis, as well as developed over 10 proprietary trading strategies. Oleg’s motto is to help everyone come all the way from a novice trader to a professional.