Where a financial services firm is subject to the Money Laundering Regulations and regulated by the FCA simplified due diligience can be applied. This can also be used for finincial services businesses in the EU or equivalent jurisdiction where they are regulated by an equivalent regulator.
Regulated Financial Services Company Information
Understanding the name of your client including any previous or trading as names is important for obtaining a clear picture on you client. This will also be useful should you need to undertake any further research.
The location in which your client is living or working may be a factor in increasing the risk they bring. In some countries the approach to anti-money laundering and the prevention of bribery and corruption is not sufficiently enforced. This could result in a potential for criminal funds to filter through your business.
The method in which a client is interacted with will adjust the associated risk. Having a relationship where a client is never met face to face is at higher risk for fraud and steps should be taken to minimise the risk.
It may be that your business only provides a single core service and therefore the level of risk will be consistent. However, where different product or services are offered you may wish to adapt the level of due diligence undertaken based on this risk.
Understanding what will be normal for your client will enable you to identify when something abnormal happens. There may be a valid reason for changes in your client’s activity such as a significant increase in the amounts going through your business. However, it could be an indicator to a change in the risk the client brings warranting a higher level of due diligence.
Beneficial owners do not need to be identified as simplified due diligence is applied.
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