Anti-Money Laundering (AML) checks are set out by the Financial Conduct Authority (FCA) to prevent proceeds from criminal activity being filtered through the banking system. This is part of the process we perform when verifying every new freemarket member.
Every bank account has an International Bank Account Number (IBAN). It is a unique code which provides a standard way to identify any account, worldwide.
The institutional, or interbank, rate is the price banks use to exchange a currency with each other. It is usually very close to the mid-market rate. At freemarket, we use this rate to buy currency to cover members’ requirements that aren’t matched in a scheduled exchange, and we pass the price on.
Know Your Customer (KYC) checks are part of the Anti-Money Laundering procedures set out by the Financial Conduct Authority. They protect companies and their customers from fraudulent behaviour, and we carry them out as standard when we verify a new freemarket member.
Usually, financial institutions make money by charging different prices for buying and selling a currency. The mid-market rate eliminates this margin, and is the exact halfway point between the two. At freemarket, is the rate we use for our matched, scheduled currency exchanges.
At freemarket, you exchange your currency with other members, rather than buying from a bank; this is an example of a peer-to-peer service. Our members supply and demand the currency, and our service merely matches those requirements and calculates a fair mid-market rate.
In currency exchange, Pip stands for “point in percentage”; it is used to describe how values change between currencies. It is usually measured at the fourth decimal point. For example, if the GBP/EUR rate is 1.1425, and the Pound depreciates by five Pips against the Euro, the new rate would be 1.1420; a depreciation of €5 in every £10,000.
When an institution buys a currency at one price and sells it at another, the difference between the two rates is called the spread margin. It is often denoted in Pips. At freemarket, our members’ exchanges use a fair, mid-market rate, so there is no need to lose money between buying and selling prices.
SWIFT / BIC
The bank that holds your account has a unique Bank Identification Code (BIC), which enables other banks to send and receive secure messages about payments. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) code is one format of BIC.