AML (anti-money laundering)

Anti-Money Laundering (AML) refers to the legal frameworks and procedures financial institutions implement to detect and report suspicious financial activity. These measures aim to prevent the proceeds of criminal activities, such as drug trafficking or terrorism financing, from being laundered through the financial system. Banks and brokers collect client information and monitor transactions for unusual patterns, like large, frequent deposits or withdrawals without a clear economic purpose.

For a retail trader, AML requirements primarily involve the Know Your Customer (KYC) process during account opening. This means providing identification documents, proof of address, and sometimes source of funds. Withdrawals may also be restricted to the same method and account used for deposits. While these checks can cause minor delays, they protect the financial system's integrity and mitigate risks like fraud for individual traders.