What does KYC stand for in the context of investment?

KYC stands for "Know Your Client," which is a critical concept in the context of investment and financial services. It refers to the process of a financial institution or investment dealer verifying the identity of their clients and understanding their financial circumstances, investment objectives, and risk tolerance. This helps institutions prevent fraud, money laundering, and the financing of terrorism, while also ensuring that they provide suitable investment advice that aligns with the client’s specific needs and circumstances.

The KYC process typically involves collecting various forms of personal identification, understanding the client's financial situation, and assessing their investment experience and goals. By doing so, firms can build a comprehensive profile of their clients, allowing for tailored financial advice and ensuring compliance with regulatory requirements.