The US US Futures Market Department has issued counseling to inform the introduction of brokerage (IBS) and future fulfillment contracts (FCMS) on the importance of exercising increased attention when boarding a new person or client of the company.
The department has identified several seemingly suspicious actions by some new customers who have to watch out for IBS and FCMS to board a customer or just created an account, including:
- use of misleading documents, such as falsified passports and account/bank declarations;
- submission of false information and/or certificates;
- Representing the entities and people who do not exist.
- negotiation in a manner leading to large changes in profits or losses in an account;
- directly or immediate requests for withdrawal of funds through cable transfer.
- Customer not communicating with FCM/IB when asked questions.
- Failures to cover marginal calls.
- failures of compliance with a request for testimony from the department; and
- A person’s plastering for an interview in the department.
To help alleviate these risks, the Department encourages IBS and FCMS to review their on -the -spot customer procedures and to enhance due diligence measures, if necessary, of:
- conducting more complete history checks;
- verification of all customer documentation (eg validity of the address provided, passport or permit);
- Understanding the customer’s reasoning for negotiation and for what specific purchases. (For example, was it the new customer to open an account or exchange an exotic market through a group forum or conversation?).
- Challenging and examining the customer’s commercial experience, especially in exotic strategies/choices.
- Monitoring requests for transfer posts recently open account to another FCM.
- the placement of lower trading limits on new customers for a test period or especially in exotic purchases/options; and
- Strong monitoring to detect suspicious post -boarding activities, such as preliminary and money passing by transactions or unusual trademark standards at low volume or exotic markets.