Know Your Customer
Members and Associates have a duty to acquaint themselves sufficiently with the personal and financial circumstances of each forex customer to determine what further facts, explanations and disclosures are needed in order for the customer to make an informed decision on whether to enter into forex transactions.
Every Member should determine what information it will obtain from a prospective forex customer. At a minimum, the Member soliciting the customer to engage in forex transactions should obtain the customer’s name, address, principal occupation or business, current estimated annual income and net worth, approximate age, and an indication of the customer’s previous investment and trading experience. Members and their Associates need to ensure that each customer they solicit has received adequate information concerning the risks of forex transactions so that the customer can make an informed decision as to whether forex transactions are appropriate for the customer. These obligations fall on the Forex Dealer Member when a non-Member solicits the customer.
Members and APs have a duty to make sure customer makes informed decision with regard to forex transactions (FDMs have this duty if non-member solicits customer):
- Should consider personal and financial circumstances
- Should provide additional facts, explanations, disclosures if necessary
- Members must decide what information to request from a customer
- Minimumum information – customer’s name, address, principal occupation or business, current estimated annual income and net worth, approximate age, and an indication of the customer’s previous investment and trading experience
- Minimum information: customer’s name, address, principal occupation or business, current estimated annual income and net worth, approximate age, and an indication of the customer’s previous investment and trading experience.
Study Guide >>Forex Regulations >> Know Your Customer
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