It appears that you joined this forum a few hours ago for the express purpose of bringing JAFX to our attention. Are you an IB for JAFX, or otherwise affiliated with this broker?
Here’s what I have dug up about JAFX –
JAFX Ltd is incorporated in St. Vincent and the Grenadines (SVG).
Their online documents do not make clear where they are physically located, except that:
• they have call-centers in the U.K. and in Australia (see the Contact Us page on the website)
• clearing and billing services are done by some entity in Montenegro (see Terms and Conditions, upper section, para. 59)
• payment services are provided by a JAFX entity in Bulgaria (see the fine print at the bottom of each webpage)
This broker appears to be catering to U.S. persons (residents and/or citizens), while maintaining “plausible deniability” in the event that they have to deal with U.S. authorities.
At the bottom of each webpage, JAFX states that their site is “not directed towards soliciting citizens or residents of the United States.” However, much of the language in their Terms and Conditions is specifically directed toward U.S. persons — example, the reference (below) to a Section of the Internal Revenue Code, a provision which applies only to U.S. persons.
Most alarmingly, JAFX requires live account holders to certify that the funds they are depositing do not come from the United States. In other words, the U.S. customer must lie about the source of the funds, so as to exonerate JAFX of any knowledge or responsibility regarding the source. In the process, the customer risks charges of fraud or money-laundering for lying about the funds. That’s a great way to start a broker-client relationship, wouldn’t you say?
The following is copied-and-pasted from JAFX’s Terms and Conditions:
• FOREIGN ACCOUNTS. Customers not residing in the United States (”Foreign Accounts”) may be asked to comply with requests for special information by JAFX as required by any governmental unit or regulatory agency. (T&C, upper section, para. 43)
• Social Security / Tax ID Certification. Customer hereby certifies, under penalty of perjury, that (1) the number provided on the Customer Application is Customer’s correct Social Security or Taxpayer Identification Number and (2) the ownership, or beneficiary, of Customer’s Account is not subject to backup withholding under Section 3406(a)(1)© of the Internal Revenue Code. (T&C, middle section, para. 31)
• Customer also hereby confirms that these funds are free of any liens or debts, are clean and non-criminal in origin and do not originate from the United States of America or any country on the Office of Foreign Assets Control (OFAC) List. As such, Customer agrees to comply with any request to provide additional documentation that is requested by JAFX and its representatives. (T&C, bottom section, un-numbered paragraph following para. 29)
Finally, JAFX makes it very clear that customer funds may be moved from customer’s account to another account, at the sole discretion of JAFX. Furthermore, customer funds will be commingled with the broker’s own funds, and may be used by the broker for any purpose, including security for loans or proprietary trading. Are you comfortable with that?
Here’s additional copy-and-paste:
• Authorization To Transfer Funds. Customer hereby agrees that JAFX may, at any time and from time to time, in the sole discretion of JAFX, apply and transfer from any of Customer’s Accounts with JAFX to any of Customer’s other accounts, whether held at JAFX or other approved financial institutions, any of the Contracts, currencies, securities or other property of Customer held either individually or jointly with others to another account. (T&C, middle section, para. 29)
• Agreement To Use Collateral. Customer authorizes JAFX to sell, pledge, rehypothecate, assign, invest, commingle and otherwise use any Collateral held by JAFX, including, but not limited to, using the Contracts as collateral for a loan to JAFX, and, further trading with the Collateral, as provided in the Customer Agreement (including, but not limited to Paragraph 6 thereof). Where Customer’s Account consists of more than one Account, this authorization shall apply to all of Customer’s Accounts with JAFX. This Agreement to Use Collateral shall remain in effect so long as Customer’s Account with JAFX remains open or Customer has any obligations of any kind to JAFX, under the Customer Agreement. (T&C, middle section, para. 30)
I guess now we can remove the question mark following SVG in the listing for this broker.