A Trading App on a Partner Broker's API or Your Own Brokerage Licence: What Each Route Needs and What You Own

You can launch a trading app without building a brokerage. A partner broker, a licensed firm that executes your clients' orders and holds their shares and cash, connects to your app through its API (the interface your software uses to send orders and read accounts). If your company signs up the clients and passes their orders on, it will usually need a legal status of its own. In the EU and the UK, it can act as the agent of a licensed firm, under that firm's licence. A step up is your own licence to receive clients' orders and pass them to the partner, and the largest step is a full licence to execute orders and hold client assets yourself. The routes differ in who your clients sign with and what stays yours if you change partners.

What does a partner broker do, and what is left to us?

A brokerage does two jobs an app cannot do alone. It executes orders, sending them to an exchange or another trading venue, and it keeps clients' shares and cash in accounts, a job called custody. A partner broker does both, plus the work behind them, such as settling trades (completing the exchange of shares and cash after each trade) and producing statements. Your company builds the app, signs up and supports clients, and pays for marketing.

Upvest, an investment infrastructure provider, describes itself as “authorised across Europe and the UK by Bafin and the FCA”, the German and UK financial regulators. Its operating models page, read on 16 October 2026, sets out this split. Upvest calls the model where its own licences do most of the work “Take-our-licence”, although your company still holds a licence to pass on orders in it.

In this model, “Upvest provides end-to-end functionality across brokerage, settlement, and custody”, while “You own the frontend and overall user experience”: the screens your clients see. The page also says “Both you and Upvest have end-user-facing contracts”. It adds that “Upvest relies on your KYC to onboard end users”, so the identity checks on new clients, known as KYC, are your job.

In the US, Alpaca's Broker API documentation, read the same day, describes a fully disclosed setup, in which each client gets an individual account at Alpaca: “Alpaca receives each customer's information in order to open an account and provide our services.” Alpaca also checks your company's programme for identifying clients and preventing money laundering: “Alpaca will conduct due diligence on your firm, including a thorough review of your CIP/KYC/AML program.”

Can we launch without a licence of our own?

In the EU you can, as a tied agent of one licensed firm. MiFID II, the EU directive on investment services, defines a tied agent as a person or company acting “under the full and unconditional responsibility of only one investment firm on whose behalf it acts”. A tied agent may promote that firm's services, receive clients' orders and pass them on. Article 29 of the directive also requires tied agents to be listed in a public register in the country where they are established.

A tied agent can represent only one licensed firm, so changing partners means being appointed again by the new firm. The firm you represent has to make sure you tell clients its name before you deal with them, which puts that name in your app. Because it answers for you, the directive also requires it to monitor your activities: expect it to review your app and your marketing. Upvest's page offers this route through its partner network, as an alternative to holding a licence, and calls it a “liability umbrella (tied agent model)”.

The UK has an arrangement similar to the tied agent. The Financial Conduct Authority (FCA), the British regulator, says on its page about it: “An appointed representative (AR) carries on regulated activity under the responsibility of an authorised firm, known as ‘the principal’.”

In the US, the Securities and Exchange Commission (SEC) still publishes a staff Guide to Broker-Dealer Registration dated April 2008. Broker-dealer is the US term for a registered brokerage. The guide lists questions that tell a business whether it may have to register as a broker. Two of them are “Do you participate in important parts of a securities transaction, including solicitation, negotiation, or execution of the transaction?” and “Do you handle the securities or funds of others in connection with securities transactions?”

The guide adds: “A ‘yes’ answer to any of these questions indicates that you may need to register as a broker.” Its list of businesses that may need to register includes “persons that operate or control electronic or other platforms to trade securities”.

Partner brokers' own documents also expect the company behind the app to hold a status of its own. Each of the three common setups on Alpaca's Broker API use cases page begins with your company's status: “You are a registered broker-dealer” in two of them, and “You are a SEC-registered RIA”, an investment adviser registered with the SEC, in the third. Treat any promise that your app needs no licence as a question for a lawyer in each country where you will sign up clients.

What changes if we hold our own licence to pass on orders?

Your company becomes a licensed firm itself, but only for the part of the work your app does: receiving clients' orders and passing them on. The partner keeps executing orders and holding assets. MiFID II lists that work as an investment service of its own: “Reception and transmission of orders in relation to one or more financial instruments”. Upvest's “Take-our-licence” model puts that licence on your side: “You hold the licences for receiving and transmitting orders (RTO) to Upvest, the executing broker (EXO).”

The licence decides how much capital the company must have from the start. Under Article 9 of the EU's Investment Firms Directive, a firm that receives and transmits or executes orders, and “is not permitted to hold client money or securities belonging to its clients”, needs initial capital of EUR 75,000. A firm allowed to hold client money or securities needs EUR 150,000, and a firm that trades with its own money, on its own account, needs EUR 750,000. Article 7 of MiFID II gives the national regulator six months from a complete application to tell the applicant whether it is authorised.

The licence also brings record keeping, and those records come from your app and its servers, so they are part of what you build. Article 16 of MiFID II requires an investment firm to keep records of “all services, activities and transactions undertaken by it”, including electronic communications about receiving, transmitting and executing client orders. The firm must keep recordings of those communications for five years, or up to seven if the regulator asks.

Outside the EU the figures differ. The article on brokerage licences in Kazakhstan, Uzbekistan, Armenia and Georgia, linked above, gives each regulator's capital floor and review period.

When does a full licence make sense?

A full licence makes sense when you need something the partner cannot give you:

• Your clients sign only with your company
• You can offer markets, products or account types the partner does not
• You decide which firm executes which orders, and you can use more than one

The step itself costs capital, licensed staff and months of preparation, so weigh it against the revenue those changes should bring.

A full licence lets your company execute orders and keep client assets itself or with a custodian it picks, and the partner becomes a supplier in the background. Upvest's “Bring-your-own-licence” models describe that split: “As a bank or investment firm, you hold all end-user-facing licences, including the licences to distribute investment products, execute orders on behalf of end users, and safekeep securities for end users in regulated custody accounts.” In those models, Upvest holds the licences “to safekeep securities for you in omnibus account(s) as a sub-custodian and to execute orders on your behalf as an executing broker.”

An omnibus account holds many clients' assets under one name, and your company keeps the record of what belongs to whom. Alpaca's documentation says of its omnibus setup that “your end customer information (e.g. name, address) is not disclosed to Alpaca” and that “you are responsible for all tax reporting in your local jurisdiction.”

What does each route mean for the software we build?

Under a partner's licence, or with your own licence to pass on orders, the app is most of the build. It covers sign-up and identity checks, funding the account, the order screen, the portfolio and a screen for the statements the partner produces. Behind it sits your server, which calls the partner's API, keeps your own records of clients and orders, and gives your support staff a view of each account. Ask the partner how it announces changes to its API, because an unannounced change can break your app.

A full licence adds the systems a broker runs. On an omnibus setup, that starts with the client ledger, the record of each client's cash and positions, matched every day against the partner's or the custodian's records. Client and tax reports follow, and so does an order management system, the software that tracks each order from the app to the market and back. If you later connect to exchanges yourself, ask each exchange how it tests and approves a new connection. For the trading screens themselves, the article on renting, licensing or building a trading terminal, linked above, compares the routes.

What should we be able to take with us if we change partners?

Changing partners means moving clients' accounts, so agree on the exit before launch. Put these points in the contract with the partner:

• Which client records you may keep and export, in what format and how quickly
• How client accounts and their assets move to a new broker, and who pays for the transfer
• How long the partner keeps serving your clients after either side gives notice, and what happens to open orders during that time

The app's code is a separate question, decided in the contract with whoever builds it. Write down that the code belongs to your company and which parts, if any, stay with the builder.

What should we ask a partner broker before signing?

Send every candidate the same questions:

• Which legal status does our company need in each country where we plan to sign up clients, and do you offer a tied agent or appointed representative arrangement there?
• Who do clients sign with, and whose name is on their statements?
• How will you audit the identity checks you rely on us to carry out?
• Which markets, products and account types can our clients use through you?
• How do you announce API changes, and what happened during your last outage?

Before you sign, look the partner up in the regulator's register. MiFID II requires every EU country to keep a public register of investment firms showing “the services or activities for which the investment firm is authorised”.

Where does amBrain fit?

amBrain builds algorithmic trading infrastructure: order execution, market data and pre-trade risk controls. One line on amBrain's website reads: “Trading terminal development, order management systems, and FIX protocol exchange integration.”

amBrain has been building software since 2019. It works in three formats: full delivery, a dedicated team, or engineers embedded in your team. Its line on ownership is “The client keeps full ownership of the product and the code, except our reusable components.” Ask for the list of those components by name before you sign.

This article is not a case study. It does not say that amBrain has connected an app to Alpaca, Upvest or any other partner broker, applied for or obtained a licence, worked with a regulator, or built a client ledger, a custody system or tax reporting. Alpaca and Upvest are named as examples from their own published pages, and the article claims no relationship between them and amBrain. It gives no amBrain prices or timelines and is not legal advice.