The stock market has been a lucrative venture for many. More and more people are trying their luck in it specifically forming investment clubs. Investment clubs generally refer to a group of people investing money in different business ventures.Though an investment club can turn out as a promising endeavour, it's important for people joining and creating investment clubs to understand regulations governing it. The Financial Services Authority (FSA) in the United Kingdom is the authoritative body ruling investment clubs.
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Proof of Identity
The Financial Services Authority in the United Kingdom, serves mainly as a watchdog for different financial entities including investment clubs. Under FSA, investment clubs need to abide by several rules and regulations such as the money-laundering regulations.
Money-laundering regulations requires firms and other financial entities like investment clubs to provide proof of identity. The regulations aim to prevent illegal transfer of money and other financial-related crimes. These regulations require basic information such as place of residence and proof that the individual is in fact residing within the set area.
For members of investment clubs, identity can be proven through a driver's license, passport, or a benefits book from The Pension Service or Inland Revenue and Inland Revenue Tax Notification.
Proof of address may be achieved by presenting: latest utility bill, passbook, bank statement, credit union or building society statement, latest local authority tax bill or even latest tenancy agreement. An original mortgage agreement or the local council rent card may also be presented as proof of address.
Under the money-laundering law, authorised firms, which includes investment clubs should be able to notify the FSA if they function as company service providers, money services Business Company or simply a trust company.
Investment entities are also required to state whether an affiliation exists with a currency exchange office, are under the European Union's payment regulation, are involved with any transmission of money and cashes checks subject to payable terms. Under regulations, the investment entity should be able to notify the FSA within 28 days.
FSA requires investment entities to register if they are involved in specific types of businesses such as: lending, payment services, financial leasing, provision of commitments and guarantees, money broking, management and issuance of different payment methods and portfolio management advice. Additionally, the investment organisation may have to register if they are also affiliated with business transactions such as: administration and safekeeping or securities, account trading and similar dealings. The FSA provides a complete guide and registration form for this procedure.
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