Regulation and Compliance Archives - MKTPlace

UK Sponsorship Licence: A Guide for Employers

Market Place — Fri, 28 Feb 2025 18:55:56 +0000

If you’re a UK employer looking to hire talent from overseas, you’ll need a UK Sponsorship Licence. But what exactly is it, and how do you get one? Let’s break it down in a simple and conversational way.

What Is a UK Sponsorship Licence?

A UK Sponsorship Licence is official permission granted by UK Visas and Immigration (UKVI) that allows businesses to hire foreign workers. Whether you run a company, a sole proprietorship, or operate as an individual employer, this licence is essential for recruiting non-UK residents.

Once you have the licence, you can issue Certificates of Sponsorship (CoS) to foreign workers applying for the following visas:

UK Skilled Worker visa
UK Health and Care Worker visa
UK Global Business Mobility visa
UK International Agreement visa

In return, sponsors must comply with UK immigration laws and are subject to inspections by the Home Office. Non-compliance can lead to fines or even losing the licence, which directly impacts sponsored employees.

Why Does the UK Have a Sponsorship System?

The UK sponsorship system ensures that immigration remains controlled and fair. It holds employers accountable for their foreign hires, ensuring they:

Assist workers with visa applications by providing a Certificate of Sponsorship.
Pay foreign employees at least the legal minimum salary.
Follow strict employment and immigration laws.

However, having a sponsorship licence and issuing a CoS doesn’t guarantee that a visa will be granted. Each applicant must still meet the Home Office’s eligibility criteria.

Who Needs a Sponsorship Licence?

Since Brexit, as of January 1, 2021, even EEA and Swiss citizens need sponsorship to work in the UK. If you plan to hire a foreign worker—whether for long-term employment or even as a charity volunteer—you’ll need a sponsorship licence.

Requirements to Obtain a UK Sponsorship Licence

To apply for a sponsor licence, your business must meet several criteria:

Legal Registration: Your company must be officially registered and operating in the UK.
Physical or Virtual Presence: You need to prove that your business operates in the UK, even if you don’t have a physical office.
Genuine Job Offer: You must have a real vacancy that requires a foreign specialist with relevant skills.
HR & Compliance System: A robust HR system must be in place to manage recruitment, track employees, and meet sponsorship obligations.
Clean Record: The company, its directors, and key personnel must not have a history of immigration violations or criminal convictions related to fraud or money laundering.
Previous Compliance: If you had a licence revoked before, reapplying may be difficult.

The Genuineness Test

The Home Office assesses whether the job you’re offering is legitimate and necessary. To pass this test, your job offer must:

Be for an occupation on the Shortage Occupation List.
Match the candidate’s qualifications and experience.
Be a genuine necessity for your business operations.

Failing to prove these factors can result in application rejection or even suspension of an existing licence.

Choosing the Right Sponsorship Licence

There are two main types:

Worker Licence: For long-term employment, including Skilled Worker and Health and Care Worker visas.
Temporary Worker Licence: For short-term roles like seasonal work, charity, or religious positions.

Employers can apply for one or both types, depending on their hiring needs.

Sponsor Responsibilities

Once you obtain a sponsorship licence, you must:

Keep up-to-date records of sponsored employees, including visa details and employment contracts.
Monitor and report employee absences or breaches of visa conditions.
Notify the Home Office about business changes, such as a change of address or key personnel.
Ensure all sponsored workers are paid the legal minimum salary for their job category.

Final Thoughts

Hiring foreign workers in the UK is a structured process that requires compliance with immigration laws. A UK Sponsorship Licence is your key to recruiting global talent, but it comes with responsibilities. If you’re planning to sponsor a foreign worker, make sure your business meets the Home Office’s requirements and stays compliant to avoid penalties.

With proper planning, getting a sponsorship licence can be a straightforward process, opening doors to skilled professionals from around the world.

For the latest updates and guidance on UK sponsorship licences, visit the official UK government website or consult with an immigration expert.

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Copy Trading Rules Clarified By FCA UK

Market Place — Wed, 21 Jan 2015 14:00:32 +0000

The Financial Conduct Authority of the UK has released a clarification on the nature of copy-trading services like eToro and the kind of permissions that platforms will need in order to carry out the practice in the country.

Copy trading is a relatively new type of investment that allows investors to release their trades publicly and have other traders follow them in their decisions. Online social trading platforms are driving the possibilities, and they’re becoming a big enough problem that financial regulators are .

The basic definition at the heart of the statement from the FCA is the following: If the brokerage asks permission before every copied trade it’s not managing the portfolio. If it executes the trades automatically it is involved in portfolio management and will need a license that allows it to do so legally.

In its own words it is portfolio management in a case where“managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments.”

Regulators move in
The increased popularity of copy-trading is making it impossible for investors to avoid regulating the area, though there seems to be little protest from inside the industry to the current level of regulation. It’s clear that the area is becoming important enough to pay attention to, though it’s not being regarded as a major concern.

A relatively light touch procedure is certainly being followed, but increased regulation may still bring massively increased costs. This week’s announcement could cause an increase in wages and legal fees for some copy trading platforms, and the effects of regulatory action in the UK will inform the debate on similar moves on the line in the United States.

As with so many Internet-borne financial innovations, most traders are waiting to see what the establishment thinks before getting in on the action. With stories of fraud and bad returns strangling much of the media coverage of breakout Fintech, it’s not surprising.
Big returns are there for some people, and there will always be stories of the major victors in the papers. Copy trading should only be added to a portfolio if the risks are understood, and you have a good idea of the process from start to front.

Copy trading gains prominence

With an increase in lower cost trading platforms, copy trading is becoming a real force in retail investment. Though people have always tried to follow the likes of Warren Buffett into big moves, today’s atmosphere is decidedly different from that old-school style.

Nowadays using platforms like eToro you can follow somebody without a news presence and attempt to get exposure to their good decision making. The point of the regulator’s clarification is that this sometimes constitutes portfolio management by the investment services offering it.

Regulators have essentially decided that if the client needs to approve each trade there is no need for the platform to follow portfolio management regulations. If, however, the trades are executed automatically in line with the investor’s follows, that is seen as portfolio management and extra rules have to be followed in order to make it legal.

Shock risks loom big

Famed experts on copy trading sites, like Chris Fahrner a 25-year-old German currency trader, aren’t immune to the problems of the wider market, meaning that shocks, like that in Switzerland last week can cause huge slumps.

Fahrner is one of the stars of eToro who, at his peak, had more than 5,000 people copying his every trade. His total gain across the last year is close to 300%, but in the last three months he’s lost 10% of his portfolio value and copiers keep deserting him. In the last month he’s dropped 15% of his value.

Copy-trading is investing in a single person and, though you may be able to pick the wheat from the chaff, one irrational decision can ruin an investor and wipe out your portfolio at the same time. Shock macro situations, like the Swiss Central Bank’s decision last week can be similarly destructive.

Some are still betting that copy trading will remain a niche method of investing, but the sites involved continue to grow. eToro says that growth in 2014 was four times levels in the previous year, a striking statistic.

Regulators also seem interested in letting the industry breath for the time being, so copy trading, and other forms of network driven social investment, will likely form the backbone of a major trend in changing investment in 2015.

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