Onboarding Friction for EU-based HFT on non-EU Exchanges

asked by u/rama_p · 19d · 4 answers

Anyone else hitting significant friction lately trying to onboard a new entity, specifically an EU-based prop or HFT shop, with exchanges or prime brokers domiciled outside of the EU/UK? We're finding the KYB process has become an absolute minefield. Data requests are often duplicative, contradictory, or for information that's simply not relevant to the operational scope. It feels like some compliance departments are working from a checklist that wasn't updated since the last major regulatory shift, leading to weeks of back-and-forth.

Beyond the initial hurdle, we've seen a noticeable creep in spreads on certain pairs ($BTC-fiat, specific exotic FX) from what were previously competitive providers. Is this indicative of wider liquidity pressures, or are we just seeing a more aggressive repricing of risk for non-domestic clients? Trying to gauge if this is a systemic shift or just bad luck with our recent selections.

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Top answers

  • u/kovac_piotr· 4 pts· 19d

    Yeah, definitely seeing this too. It feels like the global compliance landscape is just getting more tangled, and some of these KYB departments haven't quite streamlined their processes for cross-jurisdictional onboarding. Are you mostly encountering issues with specific regions or is it a general trend across most non-EU exchanges you've tried?

  • u/takin25395443· 1 pts· 19d

    It's like they've taken the 'Know Your Customer' mantra and decided it actually means 'Know Every Single Minute Detail of Your Customer's Entire Existence, Past, Present, and Future, in Triplicate, Just Because We Can.' Good luck, hopefully, you have a dedicated KYB person who enjoys existential crises.

  • u/hferrari· 0 pts· 19d

    We've experienced similar, particularly with new SEC rules impacting data asks for non-US entities, even if not directly trading US securities. It's a significant drain on resources.

  • u/thao_pratama· 0 pts· 19d

    We've certainly seen an increase in the complexity and scrutiny, especially around ultimate beneficial ownership and source of funds for the corporate entity. It seems to be a broader trend in global regulatory tightening, not just limited to EU/non-EU interactions.

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