Compliance and Due Diligence
Speaking of due diligence, when it comes to a client's application documents, there are a number of steps taken once a client/investor has made the decision to proceed into the onboarding of his or her documentation. To help explain this process, we have prepared a presentation that reviews what happens, and some of the rules that regulate this type of program.
The rules around Compliance have become even more stringent than in the past, what with the ever-increasing money-laundering, drug money and terrorist attempts to fund illegal activities. What this means is that each client/investor must be squeaky clean, and the paperwork submitted must be acceptable to the program provider. Often times, we receive packages which are incomplete, or which have material errors or omissions in them, which cause immediate rejection by the program. Other issues that commonly come up are when the owner of the asset (cash, SBLC, MTN) is not the same person in the Know Your Customer (KYC) document set.
Only the actual asset owner may enter a program, not a power of attorney or a mandate. It has to be the signatory on the bank account. There are some structural options that involve a joint venture and profit sharing. This is why it is essential at the very first communication that a thorough conversation go into detail on the submitted paperwork and an interview with the client.
Here is a short list of the questions that a pre-compliance conversation will cover:
1. How long have the funds been in the current account?
2. Are you the legal titled owner of the funds?
3. What is the source of the funds, how were they earned?
4. What is the current status of the funds, i.e., are they good, clear, clean, and un-encumbered?
5. Are the funds transferable freely, if the funds are needed elsewhere for investing?
6. What type of projects are you considering to use for your profits?
7. Have you ever tried to place these funds into a PPP before?
8. Has a C/D been issued out to non-preforming parties that have not performed in the past?
9. At the proper time, can you provide an Email letter from your bank officer granting (2 different dates /times) for a meeting at the bank with the trader/compliance officer from the platform? You are welcome to attend this meeting but it is not required.
This is not a comprehensive list of all the questions, but it gives you an idea of how to be prepared to answer these when the interview time comes.
Each PPP is 'custom-built' at the time a qualified client/investor has been accepted into a program: These are not "off-the-shelf" templates for a program. The contract development process is designed for that particular client and the program provider arranging it. In the compliance process, every legal authority is consulted to determine the client's acceptability-this includes federal and international organizations that keep information on past applicants who have not performed. That's why it is so important to be squeaky clean.
The rules around Compliance have become even more stringent than in the past, what with the ever-increasing money-laundering, drug money and terrorist attempts to fund illegal activities. What this means is that each client/investor must be squeaky clean, and the paperwork submitted must be acceptable to the program provider. Often times, we receive packages which are incomplete, or which have material errors or omissions in them, which cause immediate rejection by the program. Other issues that commonly come up are when the owner of the asset (cash, SBLC, MTN) is not the same person in the Know Your Customer (KYC) document set.
Only the actual asset owner may enter a program, not a power of attorney or a mandate. It has to be the signatory on the bank account. There are some structural options that involve a joint venture and profit sharing. This is why it is essential at the very first communication that a thorough conversation go into detail on the submitted paperwork and an interview with the client.
Here is a short list of the questions that a pre-compliance conversation will cover:
1. How long have the funds been in the current account?
2. Are you the legal titled owner of the funds?
3. What is the source of the funds, how were they earned?
4. What is the current status of the funds, i.e., are they good, clear, clean, and un-encumbered?
5. Are the funds transferable freely, if the funds are needed elsewhere for investing?
6. What type of projects are you considering to use for your profits?
7. Have you ever tried to place these funds into a PPP before?
8. Has a C/D been issued out to non-preforming parties that have not performed in the past?
9. At the proper time, can you provide an Email letter from your bank officer granting (2 different dates /times) for a meeting at the bank with the trader/compliance officer from the platform? You are welcome to attend this meeting but it is not required.
This is not a comprehensive list of all the questions, but it gives you an idea of how to be prepared to answer these when the interview time comes.
Each PPP is 'custom-built' at the time a qualified client/investor has been accepted into a program: These are not "off-the-shelf" templates for a program. The contract development process is designed for that particular client and the program provider arranging it. In the compliance process, every legal authority is consulted to determine the client's acceptability-this includes federal and international organizations that keep information on past applicants who have not performed. That's why it is so important to be squeaky clean.
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