AML Compliance for Forex and CFD Brokers

Offshore and globally licensed brokers need documented AML controls and named compliance officer coverage to satisfy payment partners and meet regulatory expectations. We provide MLRO services and audit-ready policies built for forex operations

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The broker compliance reality

Consider a typical situation: an offshore incorporated broker serving global clients applies for payment processing services. The PSP requests compliance documentation during onboarding. They want to see a named AML owner, source of funds procedures, transaction monitoring approach, introducing broker risk management, and sanctions screening evidence.

Without this documentation, the application stalls. Even if you eventually provide materials, incomplete or generic policies trigger additional questions and delays. Payment partners need confidence that your compliance program addresses forex-specific risks before they’ll process your transactions.

Many offshore jurisdictions include MLRO appointment requirements within AML frameworks. The broker must demonstrate that the MLRO has authority to implement controls and access to relevant information. Firms must ensure their compliance structure satisfies these expectations while also meeting the due diligence standards that banks and PSPs apply.

This is not legal advice, but it reflects practical reality for brokers seeking banking and payment relationships.

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Specific controls that matter in forex

Source of funds and wealth for high-risk clients

Brokers accept deposits from retail and professional traders worldwide. Source of funds verification becomes critical for high-deposit clients, professional trading accounts, and customers from elevated-risk jurisdictions. You need clear procedures for when to collect documentation, what evidence satisfies requirements, and how to verify information.

This includes employment verification for retail clients, business financials for professional traders, wealth statements for high-net-worth individuals, and inheritance or sale proceeds documentation where applicable. The procedures must be risk-based, documented, and consistently applied.

Deposit and withdrawal monitoring

Transaction patterns in forex can indicate money laundering typologies. Monitoring must cover deposit velocity, rapid withdrawal after minimal trading, round-tripping between accounts, structuring below reporting thresholds, and activity inconsistent with stated trading purpose.

Your monitoring approach should define scenarios, set thresholds based on your client base, document investigation procedures, and establish escalation criteria. Auditors and payment partners want to see that you’re actively detecting suspicious patterns, not just screening at onboarding.

Chargeback and fraud signals

Chargebacks and payment disputes can indicate fraud or unauthorized account access. While fraud is distinct from money laundering, patterns like repeated chargebacks, disputes across multiple payment methods, or claims inconsistent with trading activity should trigger AML reviews.

Your procedures should integrate fraud signals into AML alert triage, document how you investigate disputed transactions, and specify when fraud indicators escalate to enhanced due diligence or account closure decisions.

Sanctions and PEP screening

Brokers must screen customers and transactions against sanctions lists and identify politically exposed persons. Screening should occur at onboarding and throughout the customer relationship, especially when customers update profile information or change geographic location.

Your screening program must cover appropriate sanctions lists for your jurisdictions, define PEP categories and risk ratings, establish enhanced due diligence requirements for PEPs, and document ongoing monitoring frequency. You need evidence of screening results, not just vendor attestations.

Introducing broker and affiliate risk

Many brokers use introducing brokers or affiliates to acquire customers. These relationships introduce risk. The IB may not apply adequate due diligence, may serve high-risk markets, or may introduce customers who pose elevated AML concerns.

You need due diligence on the IB before establishing the relationship, ongoing monitoring of introduced customer activity, procedures for terminating IB relationships when risk becomes unacceptable, and oversight of commission payments to ensure they’re not laundering proceeds.

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What banks and PSPs ask brokers for

When payment partners conduct due diligence on your brokerage, they request specific documentation:

Compliance officer information

Name, qualifications, experience, authority, and reporting line. If you're using an MLRO, they want confirmation of appointment and regulatory approval where applicable.

AML policies and procedures

Complete documentation covering your risk-based approach, CDD procedures, transaction monitoring, sanctions screening, and suspicious activity reporting

Risk assessment

Your current assessment of AML risks from products, customers, geographies, and distribution channels, with explanations of how controls address identified risks.

Transaction monitoring approach

Scenarios you monitor, thresholds you've set, alert investigation procedures, and examples of recent alert reviews

Screening evidence

Proof that you screen customers against sanctions lists and identify PEPs, including vendor documentation if you use third-party screening

Training and testing

Evidence that staff understand AML obligations, including training delivery records and testing results.

Partners want to see current documentation and evidence of ongoing program execution. Outdated policies or missing evidence will delay or block approval

Why offshore brokers face extra scrutiny

Offshore incorporation is legal and common in forex. However, banks and payment partners apply heightened due diligence to offshore entities. They know that some offshore jurisdictions have lighter regulatory supervision, and they’re concerned about facilitating money laundering.

You must overcome this skepticism with strong compliance evidence. That means documented policies that meet international standards, qualified compliance officer coverage, and monthly evidence showing your controls are working.

Offshore brokers cannot rely on licensing alone to satisfy partners. You need demonstrable compliance execution that meets the standards banks apply regardless of where you’re incorporated. Our service is designed to provide exactly that evidence.

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