SECURITY OF FUNDS POLICY

Highly regulated, transparent and segregated client accounts held with reputable global investment banks.

Exchange4free offers a safe alternative to sending money worldwide through banks or unregulated brokers.

Our company has been operating since 2004 with over 30,000 clients worldwide ensuring that you are dealing with a highly reputable company. The business operates a pure brokerage model and does not speculate against client trades or run unhedged foreign exchange exposures.

Client funds are held in segregated client bank accounts with large reputable banks.

Regulations and Licences

Exchange4free is regulated as a Money Service Business (MSB) in the following regions:

  • United Kingdom
  • Europe
  • Canada
  • Australia
  • South Africa
  • Switzerland
  • Philippines
  • Israel

Online Systems and Technology

Exchange4free uses a secure, encrypted online platform over HTTPS using an SSL certificate from Geo Trust.

We employ a high level of automated anti-money laundering  and compliance data analysis techniques to ensure data integrity and security for our clients using our system to send money globally.

Our system also use Verisign Trust Seal to ensure our system is 100% secure and malware free for all our clients.

Safeguarding Clients Funds Policy

Introduction

The key aim of the UK Payment Services Regulations (Regulation 19) is customer protection and safeguarding of customer funds is one of the main methods through which this is achieved.
Exchange4free, an authorised Payment Institution, is committed to carrying out its business to the highest ethical standards and protecting our customers’ funds is of paramount importance to us.

Scope

The purpose of this policy is to set out the minimum expected standards for safeguarding customer funds within the company. This policy reflects not only Exchange4free’s commitment to treating our customers fairly, ethically and honestly but also compliance with our regulatory obligations in the various jurisdictions in which we operate.

Safeguarding

The Payment Services Directive and the 2nd E-Money Directive both specifically outline that funds taken by Payment Institutions and E-Money Institutions are not classified as "deposits". This means that, in the UK the Financial Services Compensation Scheme does not protect these funds in the event of failure of the institution – i.e. in the event of insolvency.

Customer funds must be safeguarded at all times and there are three options to protect such funds:

  • 1. Segregation of funds in an account with a credit institution;
  • 2. Protection by an Insurance policy or Guarantee; and
  • 3. Investment of the funds in secure, liquid assets, held by a custodian.
Segregation of funds is the method used by Exchange4free and we safeguard client funds in segregated, client accounts whereby client funds are kept separate from business account funds.

Segregation

At Exchange4free, we only accept funds for clients that are as a result of an FX transaction with us. The client will execute a FX transaction, transfer funds to settle the transaction and on settlement, Exchange4free will pay out the resultant funds to the client’s nominated beneficiary. The client will settle by paying the funds into a segregated client account, which is not specific to a particular client and are held at Worldpay Limited or ING Bank.
When the resultant FX trade settles, the funds deposited by the client is debited from the client segregated account and the resultant currency account is credited.

The currency account is also segregated and held at ING Bank.

"Relevant" funds in excess of 50 GBP that are received from individuals or another money transfer business for the purpose of making a money transfer transaction fall under the protection and are required to be safeguarded.
If funds continue to be held at the end of the business day after day of receipt, the firm must either transfer those funds to a separate bank account at a bank authorised by the Financial Conduct Authority (FCA) to accept deposits or place funds in a bank located in the European Economic Area (EEA) authorised by the respective state authorities.

Exchange4free, like most money transfer businesses, deposits customer funds into an account with a major bank which will be authorised by the FCA to accept deposits. Therefore, if these funds continue to be held at the close of business the following day, there may not be a need to transfer them to another account.
Exchange4free does not retain client funds after the FX transaction has settled. The client funds are paid out on the same day as the transaction is settled.
When using an Agent, receipt of customer funds by the agent counts as receipt for safeguarding purposes so funds need to be segregated as soon as received.

Accounting and Systems & Controls

A Money Transfer Business is required to have in place systems and controls to ensure the complete and accurate recording of customer transactions and minimise the risk of loss through fraud or negligence. These consist of:

  • 1. Employing appropriately qualified and experienced internal accountants;
  • 2. Ensure that those involved in accounting and those involved in receiving and paying funds are separate;
  • 3. Ensure regular reconciliations of customer funds are carried out;
  • 4. Reconciliations must be reviewed and approved by senior management;
  • 5. Maintaining reconciliation records on file;
  • 6. An external audit of customer money systems and procedures is carried out;
  • 7. Regular reporting of customer funds to the Directors.

At Exchange4free, we have a dedicated accounting team which carry out the above tasks and ensure our systems and controls are robust and compliant.
Further, Exchange4free utilises Worldpay Limited, a specialist payment and collection service authorised to offer this specialist service in the UK to assist with its banking network. Worldpay Limited is a listed entity in the UK and use Barclays Plc and Royal Bank of Scotland as their preferred bankers.
As such, Exchange4free are satisfied with the controls and safeguarding measures that Worldpay have in place, which provides added protection.

Failure to comply

The rules of safeguarding must be followed properly to ensure that this protection is afforded to its clients, as any failure to do so could result in an Administrator seeking to claim the funds on behalf of other creditors.
By segregating client funds, in the event of failure of Exchange4free, the client funds are protected from the claims of other creditors and are only repayable to the clients of the firm involved – i.e. "Payment Service Users".

Given the liquid nature of the money transfer business, having robust systems and controls in place is very important, especially being able to reconcile the amount in the safeguarding account with outstanding client transactions. A firm needs to show that the correct amount is being safeguarded at all times. Failure to do so, may result in significant fines and penalties imposed by the regulator, even if no actual customer losses have been incurred.

Exchange4free safeguards client funds in segregated client accounts. This means that client funds are kept separate from business account funds of Exchange4free and as such are protected.

Terms and Conditions

Conditions of Use

Complaints Policy

AML Statement

Security of Funds

Fraud Warning

Privacy and Cookie Policy

Regulatory Information

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