Know Your Customer/Client - KYC procedures

Know Your Customer/Client - KYC procedures

Upon registration and opening a trading account to a forex broker, one of the most important requirements is to get the broker’s Compliance Department approval.

For your account to be verified and approved, a trader should comply with certain Know You Customer/Client (KYC) standards, which are commonly described as KYC procedures. This is a mandatory process for financial institutions and especially for regulated companies. These processes are used to verify the identity of the client and to classify the trader by assessing his suitability and risk.

Clients and in turn KYC processes can separated into two (2) main categories:

For individual clients, KYC is straightforward. The documentation required is to identify the client’s identity and proof of residence.

Other documents may also be accepted (e.g. voter’s card, birth certificate, etc) always referring to the regulator’s general compliance guidelines.

For corporate clients the KYC process is an important measure to mitigate financial risks and to ensure that a financial institution complies with specific regulations like Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) laws.
In general, the following documentation is commonly requested from a broker’s Compliance Department:

The specific KYC requirements for corporate clients can vary depending on the nature of the business, its ownership structure and the jurisdiction in which it operates.

The main goal for KYC is to protect both a financial firm and its clients from any possible illegal activities such as Money Laundering or Terrorist Financing. The main structure for KYC processes is set up from a regulator’s compliance. Brokers can adjust these processes accordingly following of course the regulator’s main rules.

Once a trading account is approved and verified from a forex broker’s compliance department, then traders can fund their account(s) and start trading. For more details in regards on which payment methods can be used to fund a trading account, you can check this article:  Forex brokers - Payment methods - Deposits and withdrawals.

Categories / Tags: Forex, KYC, Payment Methods

Related articles

How to choose the best Forex broker and CFD provider

Nowadays trading has become quite easy, since all a trader needs is the comfort of his/her home and a decent internet connection. Once someone decides to become a part of the foreign exchange market (FOREX), there are numerous financial firms available to accept clients all over the world.

Successful forex trading

Continuing our previous post on how to choose the best forex broker, we will analyze certain basic concepts which reveal that forex trading can be challenging. The complexity of the trading platform will not be considered since each trader selects the trading environment which best suits his/her needs while feeling at the same time as comfortable as possible.

Forex trading strategies and styles

Which type of forex trader are you? One of the most basic concepts in forex trading is to understand the trading strategy a trader is about to follow, which in turn will characterize and distinguish his/her trading style and type.

Forex Trading Psychology and Behavioral Finance

Having a vast knowledge of forex and the financial industry is not enough to make you a successful trader. As many things in life, psychology is the key!

Forex Trading Charts

There are many platforms developed for traders which offer many special features and services. Using a trading platform and a forex trading chart traders try to analyze the market and to identify any possible trends or price movements.

Useful Forex Trading Tips

Many traders try different trading strategies with one goal in their mind. Finding a way for profitable trades. However, no one can have continuous profitable trades. Therefore, another important part should be how to minimize losses and stay in the game. Profits and losses will inevitably occur one after the other.

What is a pip - pip’s value and pip calculations

The "percentage in point" or "price interest point" (PIP) is one of the most basic concepts in forex trading. In forex trading, a pip is the smallest price movement which can be recorded in a currency pair.

Expert Advisors (EA) software trading - Automatic trading

The excitement of trading forex and following the Markets and economic news is every trader’s dream to reach maximum profitability. What is even better is not having to spend a lot of time, and still to keep making profits. It’s almost having a passive income, but with the minimum effort from a trader’s perspective.