Verification of Customer Identity: New Regulations for Financial Institutions and Listed Businesses
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As part of efforts to enhance transparency and prevent money laundering and terrorist financing activities, new regulations have been introduced requiring financial institutions and listed businesses to verify the identity of their customers.
What is Required
Financial institutions and listed businesses must obtain relevant identification records from applicants, including:
- Full name
- Permanent address
- Date and place of birth
- Nationality
- Occupation
In addition, they must also verify the identity of:
- Directors
- Officers
- Partners
- Account signatories
- Beneficial owners
- Sole traders
Verification Requirements for Specific Entities
Financial institutions and listed businesses must obtain documentary evidence to verify the identity of:
- Trustees: a certified copy of the Deed of Trust
- Nominees: identification records
- Fiduciary customers: identification records
They must also determine whether an applicant is a politically exposed person (PEP) and conduct further due diligence measures if necessary.
Procedures for Handling Discrepancies
In cases where there are discrepancies in the information previously provided by a customer, financial institutions and listed businesses must:
- Perform due diligence procedures to verify the accuracy of the information
- Discontinue any business relationship with the customer if the information cannot be verified
- Report the matter to the Compliance Officer
Prohibitions
Financial institutions and listed businesses are prohibited from keeping anonymous accounts or accounts in fictitious names. They must identify and record the identity of customers in accordance with the regulations.
Compliance Expectations
Financial institutions and listed businesses are expected to comply with these regulations to maintain their reputation and avoid penalties. The new regulations aim to prevent money laundering and terrorist financing activities, ensuring a safer financial environment for all stakeholders.