Verifying your account with a binary options broker

It is unlikely that there is at least one trader who, at the insistence of a binary options broker, did not submit documents to confirm his place of residence, identity, and other personal data. The requirements of a financial company seeking to identify its clients seem quite reasonable. No one is surprised at all by a request to present a passport, for example, when crossing a state border, making large financial transactions, or under other circumstances. However, one should not discount the fact that by requiring a verification procedure, an unscrupulous broker receives an effective tool with which it becomes possible to delay the payment of the profit due to the client or simply not give permission to withdraw funds.

Account verification mechanism

Typically, brokerage companies, when presenting verification requirements, operate with dubious formulations, the essence of which boils down to the implementation of FATF recommendations and the alleged desire to ensure the safety of the client.

The second argument is very serious: any company should not have any doubts about the identity of the person entering into financial relations with it. After all, there are often cases when a fraudster who wants to commit a financial scam hides behind someone else’s name. The second point does not sound so convincing and raises a lot of questions.

The FATF is an intergovernmental organization dedicated to combating money laundering. She does this through the development of various standards and various recommendations for financial companies and institutions. But there is one caveat: these recommendations are not at all necessary for implementation until the government of a particular state adopts the relevant regulations.

In European Union legislation, the organization's recommendations are reflected in the Third Directive (2005/60/EC). In the Russian Federation, some FATF standards are adapted by Federal Law No. 115-F3 adopted on July 7, 2001 (as amended on November 2, 2013), which aims to prevent the laundering of illegally obtained income and subsidizing terrorist activities. In other words, these legislative acts create a barrier that prevents fraudsters and terrorists from using the mechanisms of the financial system for their criminal purposes, and force financial institutions to carry out customer verification procedures. True, these measures apply exclusively to companies registered and operating in the territory of these states.

Consequently, European FOREX brokers , whether they like it or not, are freed from the need to make a choice regarding client verification. Some companies allow themselves to manipulate the financial resources entrusted to them. Carrying out this type of activity becomes possible when registering in a country where the legislation does not stipulate measures to prevent money laundering, that is, following the FATF recommendations is not necessary, and their compliance in practice may turn out to be only a fiction.

However, not only the broker and the client take part in operations to withdraw funds from the account. The mediator plays an important role in the process. A bank or payment system acts in this capacity. They are scrupulous about identifying the recipient of the payment, often imposing rather strict conditions. This is more typical for banks. Therefore, withdrawing funds to a card or bank account implies that each company, even if unregistered in an offshore zone, may well be required to undergo a verification procedure. Moreover, such demands will be legitimate.

Checking documents during account verification

In the Russian Federation, the main document by which both identity and place of residence are verified is a passport. If the company’s intermediary in the financial services market is a Russian bank, then for verification it will be sufficient to present a civil passport and sign the relevant documents (usually limited to the Trade Agreement) to open an account.

If you choose a foreign bank, you should prepare for some difficulties. This is due to the fact that foreign financial institutions do not work with documents typed in Cyrillic. In addition, the institution of registration, except in Russia and some states that have appeared in the vastness of the post-Soviet space, is absent in other countries. This means that the page of a general passport with a registration stamp cannot serve as proof of your real place of residence to a US or EU bank.

A broker cooperating with a foreign financial institution will, at a minimum, have to require clients to provide a foreign passport or a translation of a general passport. A copy of your utility bill is suitable as proof of your place of residence. Next, all copies must be certified by a notary. Only after this they will acquire the status of a document. Otherwise, bank employees will not have complete confidence that what they are looking at is not a skillful fake.

Of course, all the demands of foreign banks are logical and justified. But they do not take into account the harsh Russian reality. After all, many people do not have their own housing and are forced to rent an apartment and live in it without registration. Where then can I get a receipt for paying utility bills? A conscientious broker, as a rule, is always able to offer an alternative option in the form of the possibility of providing another document that is significant for the bank, in which the client’s address will be indicated. If nothing of the kind is done, then it would not hurt to analyze the situation regarding the legitimacy of the verification requirements and the reliability of the broker itself.

Important Verification Points

Undoubtedly, verification is an important and effective tool that ensures the safety of financial transactions. But many enterprising brokers unreasonably raise the bar for requirements for this procedure, making it much more difficult to withdraw funds. Focusing on the following signs will help you avoid an unpleasant situation:

• Comprehensive information regarding the necessary documents is not available on the company’s website and in its internal documents before opening an account;
• when preparing documents for verification, the broker requires adherence to European standards, although he himself does not use the services of a financial institution registered outside the EU;
• reluctance to provide alternative options for replacing documents that are not required by law for a citizen of the Russian Federation;
• a broker that uses systems in which identification is simplified as much as possible (withdrawing money to a local payment system wallet, replenishing a mobile phone account) insists on providing a large number of different documents in both Russian and English.

Eliminate verification from the list of factors preventing you from withdrawing your earned funds

To avoid falling on the hook of dishonest businessmen, succumbing to the attractiveness of the bait of beautiful words and assurances of crystal honesty, adhere to the following rules:

• Before opening an account and crediting funds to it, make sure you correctly understand the verification requirements and determine your ability to provide the necessary documents;
• analyze how the status of the company, the country of its registration, the bank with which it cooperates, comply with the verification conditions (if an open source does not provide answers to all questions, contact representatives of the broker);
• decide in advance on the most preferred withdrawal methods and make sure that the verification requirements of the electronic payment systems you choose are identical to the company’s requests;
• do not start trading options with a broker until the verification procedure has been completed in order to avoid a difficult situation if the need for an urgent withdrawal of funds arises; make sure that after some time the company does not find any formal reason to delay or refuse payment.

Conclusion

Verification of a trading account is necessary and important, so before starting to work with any broker, you should go through it right away, so that later there will be no problems with withdrawing profits. It is also always worth providing only real data and not trying to deceive the broker, since if this is revealed, then it is unlikely that you will be able to return the funds.