The process of money laundering can be divided into three sequential stages:
- Placement. At this stage funds are converted into financial instruments, such as checks, bank accounts, and money transfers, or can be used for purchasing high-value goods that can be resold. They can also be physically deposited into banks and non-bank institutions (e.g., currency exchangers). To avoid suspicion by the company, the launderer may as well make several deposits instead of depositing the whole sum at once, this form of placement is called smurfing.
- Layering. Funds are transferred or moved to other accounts and other financial instruments. It is performed to disguise the origin and disrupt the indication of the entity that made the multiple financial transactions. Moving funds around and changing in their form makes it complicated to trace the money being laundered.
- Integration. Funds get back into circulation as legitimate to purchase goods and services.
Anti-Money Laundering (AML) policy
BuzzFx, like most companies providing services on the financial market, adheres to the principles of Anti-Money Laundering and actively prevents any actions that aim or facilitate the process of legalizing of illegally gained funds. AML policy means preventing the use of the company's services by criminals, with the aim of money laundering, terrorist financing or other criminal activity.
For this purpose, a strict policy on the detection, prevention and warning of the corresponding bodies of any suspicious activities was introduced by the company. Moreover, BuzzFx has no right to report clients that the law enforcement bodies are informed on their activity. A complex electronic system for identifying every company's client and conducting a detailed history of all operations was introduced as well.
To prevent money laundering, BuzzFx neither accepts nor pays cash under any circumstances. The company reserves the right to suspend any client's operation, which can be regarded as illegal or, may be related to money laundering in the opinion of the staff.
Money laundering – the process of converting funds, received from illegal activities (such as fraud, corruption, terrorism, etc.), into other funds or investments that look legitimate to hide or distort the real source of funds.
Company's procedures
BuzzFx will make sure that it is dealing with a real person or legal entity. BuzzFx also performs all the required measures in accordance with applicable law and regulations, issued by monetary authorities. The AML policy is being fulfilled within BuzzFx by means of the following:
- know your customer policy and due diligence
- monitoring of client activity
- record keeping
Know Your Customer and Due Diligence
Because of the company's commitment to the AML and KYC policies, each client of the company has to finish a verification procedure. Before BuzzFx starts any cooperation with the client, the company ensures that satisfactory evidence is produced or such other measures that will produce satisfactory evidence of the identity of any customer or counterparty are taken. The company as well applies heightened scrutiny to clients, who are residents of other countries, identified by credible sources as countries, having inadequate AML standards or that may represent a high risk for crime and corruption and to beneficial owners who resides in and whose funds are sourced from named countries.
Individual clients
During the process of registration, each Client provides personal information, specifically: full name; date of birth; origin; complete address, including phone number and city code. Individual Client sends the following documents because of the requirements of KYC and to confirm the indicated information:
- A high-resolution copy of the first page of local or international passport, where the photo and the signature are clearly seen, or a copy of driver's license with the same requirements. The indicated documents must be valid at least 6 months from the filing date.
- A high-resolution copy of a receipt of utility services payment or bank statement, containing the full client's name and the actual place of residence. These documents should not be older than 3 months from the date of filing. The Company reserves the right to impose additional due diligence requirements to accept Clients residing in certain countries.
Corporate clients
In case the applicant company is listed on a recognized or approved stock exchange or when there is independent evidence to show that the applicant is a wholly owned subsidiary or a subsidiary under the control of such a company, no further steps to verify identity will normally be required. In case the company is unquoted and none of the principal directors or shareholders already has an account with BuzzFx, the official provides the following documents because of the requirements of KYC:
- a high-resolution copy of the certificate of incorporation/certificate.
- an extract from the Commercial Register, or equivalent document, evidencing the registration of corporate acts and amendments.
- names and addresses of all officers, directors and beneficial owners of the corporate entity.
- a high-resolution copy of Memorandum and Articles of Association or equivalent documents duly recorded with the competent registry.
- evidence of the company’s registered address and the list of shareholders and directors.
- description and nature of business (including the date of commencement of the business, products or services provided; and the location of principal business). This procedure is performed to establish the identity of the client and to help BuzzFx know/understand the clients and their financial dealings to be able to provide the best services of online trading.
Monitoring of client activity
In addition to gathering information from the clients, BuzzFx continues to monitor the activity of every client to identify and prevent any suspicious transactions. A suspicious transaction is known as a transaction that is inconsistent with the client's legitimate business or the usual client's transaction history known from client activity monitoring. BuzzFx has implemented the system of monitoring the named transactions (both automatic and, if needed, manual) to prevent using the company's services by criminals.
Deposit and withdrawal requirements
All the clients' operations to deposit and withdraw funds have the following requirements:
- In case of bank transfer or transfer from a bank card, the name, indicated during the registration must match the name of the owner of the account/bank card.
- Withdrawing funds from the trading account via the method, which is different from the depositing method, is possible solely after withdrawing the sum, which is equal to the sum of client's deposits via the method and to the same account used for depositing.
- If the account was credited in the way that cannot be used for funds withdrawal, the funds may be withdrawn to a bank account of the client or any other way may be used, as agreed with the Company with the help of which the Company is able to prove the identity of the account owner.
- If the account has been credited with funds through various payment systems, funds withdrawal shall be made on a pro rata basis commensurate to the size of each deposit.
- In case of depositing via Visa/MasterCard, Wire Transfer, the withdrawal of funds, which exceed the sum of the client's deposits, is possible via any of the following methods: Visa/MasterCard, Wire Transfer. In case of depositing via another method, the withdrawal of funds that exceed the sum of the client's deposits, is possible via any available method, by the client's choice.
You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss.
Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based and your losses could exceed your initial deposit. If you are in any doubt you should seek independent professional advice.
The purpose of these Transactions is to secure a profit or avoid a loss by reference to fluctuations in the price of the underlying market. In the context of our activities, the underlying instrument may be a single security, a basket of securities, a securities Index, an exchange rate between two currencies, a treasury product, a bullion, a commodity or such other investment as we may from time to time agree in writing.
It is an express term of each Transaction that:
- Neither party acquires any interest in or right to acquire or is obliged to sell, purchase, hold, deliver or receive the underlying instrument; neither party acquires any voting rights in relation to the underlying instrument.
- That the rights and obligations of each party under the Transaction are principally to make and receive such related payments.
You may be called upon to deposit substantial additional margin, at short notice, to maintain your position. If you do not provide such additional funds within the time required, your position may be closed at a loss and you will be liable for any resulting deficit. You should ensure you monitor your positions closely and always have access to our platforms when you have open positions or pending orders.
Risks related to long CFD positions, i.e. for purchasers of CFDs
Being long in CFD means you are buying the CFDs on the market by speculating that the market price of the underlying will rise between the time of the purchase and sale. As owner of a long position, you will generally make a profit if the market price of the underlying rises whilst your CFD long position is open. On the contrary, you will generally suffer a loss, if the market price of the underlying falls whilst your CFD long position is open. Your potential loss may therefore be bigger than the initial margin deposited. In addition, you might suffer a loss due to the closure of your position, in case you do not have enough liquidity for the margin on your account in order to maintain your position open.
Risks related to short CFD positions, i.e. for sellers of CFDs
Being short in CFD means you are selling the CFDs on the market by speculating that the market price of the underlying will fall between the time of the purchase and sale. As owner of a short position, you will generally make a profit if the market price of the underlying falls whilst your CFD short position is open. On the contrary, you will generally suffer a loss, if the market price of the underlying rises whilst your CFD short position is open. Your potential loss may therefore be bigger than the initial margin deposited. In addition, you might suffer a loss due to the closure of your position, in case you do not have enough liquidity for the margin on your account in order to maintain your position open.
Costs and charges
Before you enter into a Transaction you should make sure you have read and understood our costs and charges. Our costs and charges can be found on our website.
Cash Settlement
Customer understands that CFD and FX Contracts can only be settled in cash and the difference between the buying and selling price partly determines the result of the investment.
EFFECT OF “LEVERAGE"
For many members of the public, these Transactions are not suitable. You should, therefore, consider carefully whether they are suitable for you in the light of your circumstances and financial resources and investment objectives. In considering whether to engage in this form of investing, you should be aware of the high degree of "leverage" associated with these types of investment products. This stems from the initial financial requirements applicable to such Transactions which generally involve a comparatively modest deposit or margin in terms of the overall market value of the Transaction involved, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on your Transaction. If the underlying market movement is in your favor, you may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of your entire deposit, but may also expose you to a large additional loss over and above your initial deposit.
Although our platforms have features that are designed to help minimize your risk of loss, none of these are guaranteed and you should not rely on them.
Not Advice
We do not provide investment, tax, legal, regulatory or financial advice. Any information we provide to you is purely factual and does not take into account your personal circumstances (for example your available funds and risk appetite). We may give you factual market information or information, in relation to a transaction about which you have enquired, as to transaction procedures, potential risks involved and how those risks may be minimized. Any decision to use our products is solely your decision, therefore you may wish to obtain independent professional advice from a suitably qualified advisor on any investment, financial, legal, regulatory, tax or similar matter before dealing with us.
OTC products
Transactions with BuzzFx are not transacted on a recognized or designated investment exchange, they are an off–exchange, or “over-the-counter” (OTC) derivative which is non- transferable. This means you enter into Transactions directly with us and that those Transactions can only be closed with us. Accordingly, they may expose you to greater risks than exchange transactions because your ability to open and close Transactions is solely dependent on our platforms being able to accept orders from you and to execute them. For example, if you wish to close the position earlier than the time at which it would otherwise automatically expire, you will have to close it at BuzzFx’s quotation which may reflect a premium or discount to the Underlying Market. When the Underlying Market is closed, BuzzFx's quotation can be influenced by the weight of other client's buying or selling with BuzzFx. You will have to close any position with the same provider with whom it was originally entered into.
All Transactions are legally binding and enforceable by both parties.
Currency Risk
Investing in FX Contracts and CFDs with an underlying asset listed in a currency other than your base currency entails a currency risk, due to the fact that when the CFD or FX Contract is settled in a currency other than your base currency, the value of your return may be affected by its conversion into the base currency.
Slippage & Market Gaps
Gapping (or Slippage) refers to an occurrence whereby the market moves past a Stop Loss level. This may be because the particular underlying market has become unusually volatile for a period of time. In such instances the underlying market may have stopped trading and may only recommence trading at a price below a Stop Loss level. Where this happens a Stop Loss may not be effective and the Position will be closed at the current BuzzFx Quote.
Accordingly, where you have an open Position in a volatile market environment you must understand the potential impact of Gapping.
Foreign and emerging markets will involve different risks. In some cases risks will be greater for example where those markets are less well supervised, have greater or more rapid market fluctuations or when those markets are less liquid. The potential for profit or loss from transactions on foreign and emerging markets or in foreign currency denominated markets will also be affected by fluctuations in foreign exchange rates.
Under certain trading conditions it may be difficult or impossible to liquidate a Position. This may occur, for example at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is restricted or suspended.
Safekeeping of clients’ money
BuzzFx is required to hold your money in segregated trust accounts in accordance with the applicable regulations, but this may not afford complete protection, for example if the bank that we use becomes insolvent. If you deposit collateral as security with BuzzFx, you should ascertain from BuzzFx how your collateral will be dealt with.
