We open a forex account. What documents are required?

Forex account? Required documents? This article is aimed primarily at people who are thinking about opening their first account with a Forex broker. The more it will turn out to be useful if the choice fell on a foreign company. Often, such people have doubts as to what documents they will need to set up such an account and whether it is completely secure.

Regulatory issues

Let's start with the fact that each broker can be subject to other regulations. Regulations in the United Kingdom may vary in the documentation needed to open an investment account in relation to those required eg in Cyprus. It's both about their quantity and form. I omit here the activities that the company itself must perform, and even how long it must archive all data (this time may also vary).

The more liberal a country, the fewer these formalities are or they are easier and faster to complete. For example, a Cypriot broker is satisfied with documents sent by e-mail in the form of scans or photos. In turn, a broker based in Switzerland will need these documents in physical form (sent by courier or post), in addition notarized.

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It is true that the cost of such confirmation is small (less than PLN 10), but it requires visiting a notary public, and then to the post office and waiting for the parcel to be delivered. On happiness this is a one-time operation.

Required documents

In the case of foreign brokers, two documents are most often required, while in Polish it is enough for the former, with the proviso that the contract must be signed by hand. These are:

1. a document confirming our identity,
2. a document confirming our current address of residence (no check-in).

The first document must confirm that we are actually us. Whatever it is, we set up an investment account and nothing new is to ask for an ID at the bank or even at the post office with registered mail. Usually, brokers accept an ID card or passport. Driving license is rarely accepted. Student and related ID cards will certainly be rejected.

The second document is to confirm that we live at the address we provided in the registration form. It's so-called Proof of Residence (PoR - confirmation of the address of residence). This address does not have to coincide with the one in the first document (the proof is only the address of residence, and it is not in the passport at all). Of course, no one will verify whether we actually live at this address. Postage of anything to your customers by mail is very rare. generally brokerzy require that this document is not older than e.g. 3 or 6 months.

The address confirmation can be used for example:

• gas or electricity bill,
• extract from a credit card or bank account,
• confirmation of the execution of the banking transaction,
• a letter confirming that we have a bank account in a given institution.

In what form?

It is worth bearing in mind that even if the broker accepts a scan or photo of a document, it will not always accept, for example, an account statement in the form of a PDF. Most often (but not always) a document issued physically by a given institution is required, i.e. one issued at the facility or sent by post.

It should contain such data as:

• first name and last name,
• address,
• the date of issue of the document,
• signature or stamp of a given institution.

If we have doubts whether we can use a given document, it is best to consult a broker for this purpose or immediately send it for inspection. At the most, it will not be accepted and we will try with the next one.

Security

Some of us may have concerns about sending, for example, your bank statement or even a personal ID to institutions from the other end of the continent and even the world. First of all, if we decide to open an account somewhere and deposit funds there, it is worth to trust (to some extent) the given company. It is worth checking whether it is actually regulated and whether it has a good reputation on the market among its clients. If everything is okay in this field then our fears may appear elsewhere.

By sending a bank statement, you will see, for example, the status of our account, transactions performed, as well as data of companies and people to whom the funds were transferred. Don't worry - the broker does not need this knowledge, so we can blur this information with a pen or modify it in Paint.

For obvious reasons, we cannot do the same with, for example, our ID card. However, we can secure it with a watermark. There are many free programs on the web (eg Image Watermaker) that allow you to easily put a watermark on any image file. It is enough to write "only to register an account with company X" throughout the entire length of the document and thus no other company should accept such a document.

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It would also be good to take care of the security of our computer and the mailbox. The chances are usually greater that someone will steal our data before or at the time of sending the documents to the broker rather than from him.

Application rejection

If the documents we send do not meet the relevant standards required by the broker or, more often, the regulator it is subject to, our application may be rejected. This is no tragedy, but it extends the entire registration process. If the submitted photo or scan is illegible, black and white (some require original appearance) or cut off somewhere, the company may not accept them. Another case is when, for example, we provide incorrect or untrue data in the registration form. In such a situation, we have to start the whole procedure anew.

It may also happen that the broker, for reasons unknown to us, will reject our application for opening an account. On the one hand, it has such a right, but on the other, there is probably some reason for it. This is sometimes the case with US or UK brokers. Usually the "problem" is to fill out a survey asking about your earnings and savings. Some regulators require Forex brokers to only accept clients who are well-informed and appropriately wealthy. This is to protect not only the investor himself from possible financial problems (assuming that he can lose everything on Forex), but also the broker from a loss that could result from the client's overdraft and thus problems with collecting any receivables.

Thus, choosing extremely low values ​​in questions about your savings, your annual earnings or even your current job (the unemployed and students may also be rejected) will reduce your chances of opening an investment account. It is worth bearing in mind that these data are not verified by anyone.

Good will of the broker

It happens that some companies meet customer problems. The inability to arrange the document in an appropriate form is not a problem - they turn a blind eye to it. This is somewhat good, but on the other hand, it may indicate slight negligence and risk borne by the broker. It can also be unfavorable for us. In the event of a possible control by the regulator, this company, in the event of significant violations, may receive a financial penalty or lose its license to operate. Which of course would entail financial problems and suspension of further trading on their platform.

Therefore, we should both require the broker to be reliable and help in the selection of appropriate documents when creating an account, and to understand it when he can not accept, for example, our confirmation of address if it does not meet the relevant requirements.