4
OLby u/ortiz_lucas·1moQuestion

AML compliance for micro-cap forex prop firms

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.

2 comments · 4 points

2 Comments

IAu/iahmed·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.

8
DHu/destiny_h·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?

1

More like this