The four-eye principle is a method that requires that every negotiation or decision carried out within the forex company must be seen by another individual before being corroborated. This can refer to decisions made within management but is more commonly known to take place within the treasury department.
Four-eye principle explained
The four-eye principle concentrates on ensuring that two pairs of eyes have witnessed and agreed on a decision, whether in a management setting or within the treasury department. A four eyed principle is encouraged in order to ensure that any one individual is not left to carry out a particular activity independently, without the activity having been confirmed and agreed on by another individual.
With regards to general business activity within a forex company, the four eye principle means that all business decisions and transactions need approval from the CEO and CFO before they can be carried out. In addition to the above, the four eye principle is also a common term used within the trading room. In Germany, for example, the four-eye principle is taken very seriously within the treasury department, and requires that every negotiation carried out by any trader is seen by another trader before being transacted.
The four eyes principle is becoming increasingly common within forex companies, particularly those that are dealing with high-risk activity and trade. The overriding requirement of the four eyes principle is to make sure that different sets of eyes look different parts of a forex company’s activity.