Customer Due Diligence (CDD) is a process that Forex brokers follow to verify the identity of their clients and assess the risks of doing business with them. CDD is a key component of anti-money laundering (AML) and countering the financing of terrorism (CFT) measures that brokers must comply with to prevent their services from being used for illegal purposes.
CDD requirements for Forex brokers include:
Identifying and verifying the identity of the client: Forex brokers must obtain identification documents from their clients, such as a passport, driver's license, or national identity card, and verify that the documents are authentic.
Identifying and verifying the identity of the beneficial owner: Forex brokers must identify and verify the identity of the beneficial owner of an account, who is the person or entity that ultimately owns or controls the account.
Assessing the risk of the client: Forex brokers must assess the risk of doing business with a client based on factors such as their location, business activity, and source of funds.
Ongoing monitoring of the client's activity: Forex brokers must monitor the activity of their clients on an ongoing basis to detect any suspicious activity or transactions.
Forex brokers must have robust CDD procedures in place to comply with AML and CFT regulations and prevent their services from being used for illegal purposes.
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