Brokerage as a Service: Definition and Models

What brokerage as a service means

Brokerage as a service packages the parts a broker needs to run daily operations: trading platform access, a CRM and back office, liquidity and execution connections, payment and KYC tooling, and reporting. The provider runs or supplies these parts under contract. The broker brands the service, signs the client agreements and sells to its own market.

The most important point is that technology does not carry the licence. A platform agreement or hosted access arrangement does not, by itself, authorise a company to carry on regulated activities. In the UK, the FCA’s authorisation guidance says a firm must not start performing regulated activities while its application is under review, unless an exemption or temporary permission applies, and that carrying on regulated activities without authorisation is a criminal offence. Other jurisdictions set their own rules.

How responsibilities divide in a BaaS deal

A useful test is to list every function a client touches, then assign each one to a named party. The provider normally carries the software and its operation within the agreed scope. The broker carries the decisions that the software cannot make for it: who may become a client, which products are offered in which country, how client money is handled, and how complaints and suspicious activity are escalated. The diagram below shows this split as a starting point for your own mapping.

• Provider side: platform access, CRM modules, bridge or gateway connectivity, hosting and support, all as far as the signed scope says.
• Broker side: licence and entity permissions, client agreements, marketing claims, client money controls, compliance approvals and final sign-off on go-live.
• Shared side: KYC and AML workflows, payment reconciliation and reporting, where each party needs defined inputs, owners and evidence.

Any shared item needs a written owner. Where ownership is unclear, the gap usually appears later as an unreconciled balance or an approval nobody can find.

Brokerage as a service delivery models to compare

Providers package BaaS in several ways. The table compares four common shapes. Names differ between vendors, so compare the scope lines, not the labels.

• Self-hosted software licence
  What the provider typically supplies: Platform software under a licence tier
  What the broker still owns: Servers, hosting, staffing and every integration
  Main contract check: Who holds the licence and what the tier permits
• Hosted platform access
  What the provider typically supplies: A hosted environment run by a contracted host, with manager or API access
  What the broker still owns: Entity permissions, client onboarding and liquidity agreements
  Main contract check: Host authorisation, data export and exit terms
• Modular BaaS
  What the provider typically supplies: Selected modules such as CRM, payments, liquidity bridge or market data
  What the broker still owns: The modules not supplied and the vendor contracts behind them
  Main contract check: Integration evidence and support commitments in writing
• Bundled managed package
  What the provider typically supplies: A wider set of systems plus implementation support
  What the broker still owns: Regulated decisions, client money controls and final acceptance
  Main contract check: Responsibility matrix, acceptance tests and dependency owners

MetaQuotes describes MetaTrader 5 as software that brokers run on their own infrastructure, and it states that it does not offer SaaS or similar solutions. A hosted MT5 arrangement is therefore a third-party arrangement, and its authorisation and exit terms must be confirmed with the party that holds the platform agreement.

How BaaS relates to white-label setups

In practice, white label is one common route to a BaaS arrangement. A white-label deal focuses on branding and a provider-run platform, while BaaS describes the wider set of services behind the brand, from CRM to payments to liquidity. Read the two terms as overlapping rather than opposed. Our white-label brokerage answers cover the contract questions in depth, and the forex white-label scope page lists the modules we offer on that route.

Licensing and permissions for a BaaS model

The rules that apply depend on the client, the product and the country, and they are set by the regulator where you are authorised. For retail CFD business in certain jurisdictions, the rules are strict. ESMA’s 2018 product intervention measures for retail CFDs set maximum leverage on opening a position between 2:1 and 30:1, depending on the underlying asset’s volatility, and require a standardised risk warning with the share of retail accounts that lose money. Retail CFD accounts can lose money quickly because of leverage, and ESMA’s data shows most retail accounts lose money. The FCA’s rules for retail CFDs in PS19/18 similarly limit leverage between 30:1 and 2:1 and require negative balance protection. Some BaaS providers can configure leverage and warnings, but the broker must decide and evidence that they apply.

Our licensing and compliance support page describes the scoping work we do with advisers, but the permission decision rests with the regulator, and the question of what your entity needs rests with your qualified advisers.

Contract checks before you buy a BaaS package

A short contract review catches most of the problems that appear after launch. Ask the provider to answer each point in writing, and check the answers against the signed order form rather than the sales deck.

1. Name the licence or access holder for every component, and state which party signs each third-party agreement.
2. List the modules, instruments, account types and client countries included, and list the items excluded.
3. Describe hosting, monitoring, support hours and incident escalation, with the commitments stated as written terms.
4. Set out data ownership, export formats and the process and timing for leaving the service.
5. Agree acceptance tests, with pass criteria, before the first client account is opened.

Compare the contract with the broker integration guide so that connector, testing and sign-off questions are covered before signature.

An illustrative cost example for a BaaS budget

Recurring fees are easy to compare on paper and hard to compare in practice, because each provider bundles different services. A simple model helps you test a quote before you accept it. Start with the recurring lines, add the one-time setup costs, and then add the costs the provider does not quote at all, such as legal work, banking, regulatory capital and working capital.

FxTrusts publishes its own scope and fee lines on the pricing page, including the hosted MT5 access and prop-firm CRM scopes. Those lines do not define the cost of every BaaS deal, so request an itemised proposal for your own entity and countries.