Hi I am in the process of opening a brokers account for a corporation. The company is located in South America, and I live in Europe. I am the administrator of that company and I'm going to be the only officer for that account. The broker is asking insistently the address where the daily physical business/trading operations take place, and more, they also asks from where the daily operations/trading decisions are taking place from. I would like to know why the place of the decisions is important. Any idea? thank you.
Part of the "know your customer rule". Every broker asks their own questions that are part of their Written Supervisory Procedures (WSP). Why are you concerned to respond? Bob
I don't think they have to be "up to something" to want to know an answer to their question. It's a reasonable question.
To chime in, every broker must prioritize their relationships. #1 is to satisfy the taxing authority(ies), elsewise, they don't operate. #2 is to satisfy the exchanges, elsewise, they don't operate easily. #3 is to satisfy the end-users, elsewise, they don't operate as smoothly as they might wish. Do you see where you land? Yep: third. Do you see where the taxing authority is?? Yep: numero uno. It's not that you're not important to them, it's that having "taxable events" (trading, disbursements, deposit originations) known and ironed out -- all of that takes absolute top priority.
Yes, as Bob rightly mentions above, these are simply questions their regulator requires them to ask, on opening a new account. The broker doesn't necessarily care what the answers are, but needs "to have asked the questions" in the event of any future regulatory/legal issues arising over the account - that's all.
We care when the response creates a red flag, otherwise they are typical question to meet minimum requirements.
I would think an address is essential. They most likely wouldn't accept a PO Box address. But you probably could rent a shared office space just for the physical address.
I would not say the broker does not care. The FCM/IB/Broker wants to know that the person behind the account is the actual trader and did not hand off the credentials to a third party to trade the account. Since the OP has in the LLC in one country while residing in another, they are inquiring who is(are) behind the account.
Hi The Broker required a lot of information about the company and about the owners during the application. Of course they have to do that. All those documents were sent and accepted. They have asked several times to confirm the physical address where the daily business operations are taking place. And I have confirmed an have sent a proof of that adress. What they don't understand, and seems surreal for me, is how the business is operated fron Brazil while the only listed authorized officer for that account is living in Europe. Actually the questions they did were, 1_ how the business is being operated from Brazil , when the only officers/owners listed on the account are located in Europe. 2_ please confirm if the daily operations/trading decisions are taking place from the residential address of the listed officer. It depends on the decision, of course. And there is internet in Brazil. It makes any difference if the decisisons are taked from one place or another ? A brasilian company, wit a physical office, with brasilian employees, opening an USA account . Why is important where the authorized officer is located and trading from ? thank you for the responses.