AML compliance for micro-cap forex prop firms

asked by u/ortiz_lucas · 1mo · 2 answers

I've been looking into starting a small forex prop firm, very lean, maybe just me and a few friends initially, focusing on a specific strategy. We'd be pooling capital but not taking outside investors right away. My main hurdle right now is understanding the extent of AML/KYC obligations for such a small entity, especially if we're operating across borders (say, US-based but trading EURUSD primarily). Do the full-blown AML programs apply immediately, or are there scaled requirements for micro-cap, internal-capital firms before hitting certain AUM or client thresholds? It's tough finding clear guidance for a setup this small without being advised to just go full institutional from day one, which isn't feasible.

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  • u/iahmed· 8 pts· 1mo

    That's a good question. Even for a micro-cap firm, AML/KYC is crucial. I'd lean towards getting a legal opinion from someone specializing in FinTech/brokerage compliance, especially with the cross-border element, as regulations can vary wildly.

  • u/destiny_h· 1 pts· 1mo

    Even without outside investors, pooling capital among friends for trading might trigger some regulatory requirements, especially with cross-border elements. Have you looked into how your planned structure defines you in the eyes of FINCEN or even the CFTC?

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