June 15, 2024

How to Make Use of LegacyFX’s Compliance Procedures


Experts have found that the foreign exchange market has seen a daily average trading volume of 6.6 trillion dollars from April 2019 until today.

Yet such sizable volumes raise significant concerns about the various risks involved with this type of trading. As such, it is important for forex brokers to establish appropriate procedures and compliance policies to help regulate and limit risks to themselves and their clients alike. Considering that forex brokers are financial institutions that deal with other people’s resources, these brokers should adhere to a few common practices. Typically, these policies are standard based on regulatory requirements, depending on the regulatory bodies that govern the brokerage. However other policies may vary from broker to broker.

As one of the top forex brokerages, LegacyFX makes all possible efforts to adhere to international regulations regarding the security of funds and transactions, anti-money laundering, fraud, and counter-terrorism financing. Due to such stringent policies, one is, therefore, able to focus more on trading with the assurance that their capital is safe and secure. Additionally, our clientele has access to all pertinent information and disclosures regarding commissions, fees, spreads, and trading executions, allowing an overall more transparent experience.

We will talk about some of the policies and procedures LegacyFX adheres to, per their requirements from financial regulators, and how you, as a trader, can benefit from them to possibly reduce risks and challenges you might encounter when trading.

KYC Documentation

In addition to basic financial information, LegacyFX collects personal information from its clients per its regulator’s Know Your Client (or KYC) policies. Proof of identity (ID, Passport, Driver’s License), proof of payment (Credit/Debit Card), and proof of residence (recent utility bill or bank statement from the last three months) are among the documents we request from our clients.

These documents that LegacyFX collects, shield our customers from fraud-related activities by identifying who the account holders are. Other purposes for these documents include enabling us to oversee and securely process our client’s transactions. Because LegacyFX complies with international financial regulations and keeps track of all client transactions, we can therefore ensure that any payment methods used are under the account holder’s names, to ensure that no client will ever be mis or overcharged, or that the source of their funds is not derived from illegal means.

The other reasons for gathering personal information by LegacyFX are to inform customers about transactional or post-transactional services or to keep in line with everchanging banking and financial laws, products, services, or other commercial partnerships.

Segregated Accounts

A segregated account is a specific type of account held by brokers. This type of account keeps funds, resources, and transactions of the broker’s clients separate from those of the broker. Through this, as an investor, you are assured that your capital is used for your trading needs alone and are not subject to unlawful use by the brokerage or revoked due to insolvency or bankruptcy on the broker’s end.

Overall, this policy ensures a distinct separation between broker and client funds, ensuring greater capital protection on part of the client.

Regulatory, Legal, and Financial Requirements

Since we are governed by the Vanuatu Financial Services Commissions (VFSC) and registered under Vanuatuan law, all transactions LegacyFX carries out on behalf of its clients must adhere to the rules and guidelines established by the public authorities that oversee VFSC investment companies. Other institutions that may request our compliance include the various payment institutions or banks we work with.

One example of our adherence is to Anti-Money Laundering. We accomplish this by requiring our traders to provide information that identifies the source of their funds. Such information includes identification documents for the person themselves (as stated earlier) along with possibly banking statements, proof of employment, paychecks, ownership status of a company (if applicable), etc. Additional information is sometimes requested by the various financial institutions we work with, which LegacyFX and its clientele are obligated to comply with.

In relation to client funds, LegacyFX handles all incoming and outgoing transactions only through reputable financial institutions. LegacyFX also reserves the right to block an account or incoming or outgoing transactions, if we have sound reason to believe that the holder’s transfers violate any Anti-Money Laundering or Anti-Terrorism financing policies.

All payments made via credit/debit cards, e-wallets, or direct money transfers are executed almost immediately and are facilitated back to the original method of payment. International bank wire transfers are only processed once a thorough check is performed ensuring the client is indeed the owner or affiliated with the bank the funds are to be sent to. While all these processes might take several days, they are done with the highest levels of security in mind.

Transparent Trading Conditions

As a licensed broker, LegacyFX is obligated to let investors know what fees and commissions to expect when trading. Unlike other financial market participants who do not adhere to such disclosure policies, we do not charge our clients any commissions or other fees except on stocks. As a result, many of our investors do not pay commissions if they choose to trade with us. Any and all fees subject to the various tradable assets we offer are conveniently listed on our website.

Aside from this, a $10 monthly inactivity fee (or its equivalent in the account’s base currency) is due if a trader is inactive for 90 days in a row. Investors may also be required to pay an Overnight fee for some instruments, if they are held open overnight, after the initial five days from the opening of said position.

All such fees are conveniently deducted automatically from an investor’s account, through LegacyFX’s trading platform–provided by MetaTrader 5.

Risk Disclosure

Another way LegacyFX strives to create a more transparent trading experience is through its Risk Disclosure Statement and warnings. As a regulated firm, we are required to inform our users of all potential risks before they begin employing any of our products, services, or platforms supplied by third parties.

Through these warnings–visible throughout our website, platform, and any content we display via any means, methods, or channels; we express the intrinsic risks associated with Forex and Contracts for Difference (CFD) trading. The higher risks involved with these types of trading are due to the fact that they are typically traded on margin and leverage. Leveraged or Margin trading involves borrowing funds from the broker to purchase securities. Doing so increases one is buying power within the markets as it increases the number of shares one can obtain, beyond the number of shares one could afford on their own. However, this form of trading may cause one to lose more funds than initially deposited. This is because one may be required to provide additional funds to the firm that has made the loan to avoid the forced sale of those securities or other securities in their account.

Taking the above into consideration, our Risk Disclosure Statement also stipulates that one must be financially capable and tolerant to accept even the loss of their entire investments.

Finally, LegacyFX clearly stipulates that all of its market opinions, trading ideas, signals, or the information it gives are not to be considered as direct investment advice, a call-to-action, or a guarantee that clients will be successful traders or avoid losses. Therefore, it is every individual client’s responsibility to make their own actions based solely on their own estimations and judgments.

As clearly shown above, when it comes to preparing investors for what to anticipate from forex trading, LegacyFX goes above and beyond. All these steps and more ensure a smooth, secure, and compliant experience for our traders, while also maintaining our own regulatory and legal policies to keep our business and client relations in check.

Click Here to open an account with us and see how else we can provide you with a secure and seamless entrance to the world of trading.

Blog Article by Legacy FX



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