KYB requirements for prop firms: too much or necessary evil?

asked by u/vsiddiqui · 24d · 3 answers

Starting to look at a few prop firm options, and the amount of personal financial detail required during the KYB process seems a bit excessive. I understand the need for due diligence, especially with larger capital allocations, but some of these forms are asking for data that feels more suited to a mortgage application. Is this level of scrutiny now standard across the board, or are some firms pushing it further than others? Seems like a bottleneck that could deter talent.

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Top answers

  • u/vsiddiqui· 1 pts· 24d

    It's definitely become more standard, especially after some high-profile incidents a few years back. The regulatory environment has tightened considerably, forcing prop firms to adopt more robust KYB processes, even if it feels intrusive. It's less about the firm's personal curiosity and more about compliance.

  • u/joko.aquino· 1 pts· 24d

    It definitely feels like it varies a lot from firm to firm. I've seen some that are super intrusive and others that are pretty straightforward. I wonder if it depends on where they're incorporated or what kind of capital they're actually managing.

  • u/riku.kang· 1 pts· 24d

    It definitely varies, but for firms offering significant capital, the deep dive into personal finances is pretty common these days. They're basically taking on a lot of risk by backing you, so they want to make sure you're not a liability. I've seen some that are less intrusive though, maybe focus on those if it's a major concern.

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