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  • Verification of Identity and Source of Funds

    • FC-1.1.1

      Investment firm licensees must establish effective systematic internal procedures for establishing and verifying the identity of their customers and the source of their funds. Such procedures must be set out in writing and approved by the investment firm licensee's senior management and must be strictly adhered to.

      Amended: January 2020
      Amended: October 2014

    • FC-1.1.2

      Investment firm licensees must implement the customer due diligence measures outlined in Chapter FC-1 when:

      (a) [This Sub-paragraph was deleted in July 2018];
      (b) Establishing business relations with a new or existing customer;
      (c) A change to the signatory or beneficiary of an existing account or business relationship is made;
      (d) Customer documentation standards change substantially;
      (e) The licensee has doubts about the veracity or adequacy of previously obtained customer due diligence information;
      (f) A significant transaction takes place;
      (g) There is a material change in the way that an account is operated or in the manner in which the business relationship is conducted; or
      (h) There is a suspicion of money laundering or terrorist financing.
      Amended: July 2018
      Amended: January 2007

    • FC-1.1.2A

      Investment firm licensees must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

      Added: October 2014

    • FC-1.1.2B

      Investment firm licensees must conduct ongoing due diligence on the business relationship, including;

      (a) Scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
      (b) Ensuring that documents, data and information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
      Amended: October 2017
      Added: October 2014

    • FC-1.1.2C

      An investment firm licensee must also review and update the customer’s risk profile based on their level of ML/TF/PF risk upon onboarding the customer and regularly throughout the life of the relationship. The risk management and mitigation measures implemented by a licensee must be commensurate with the risk profile of a particular customer or type of customer.

      Added: January 2022

    • FC-1.1.3

      For the purposes of this Module, 'customer' includes counterparties such as financial markets counterparties, except where financial institutions are acting as principals where simplified due diligence measures may apply. These simplified measures are set out in Section FC-1.8.

      Amended: January 2007

    • FC-1.1.4

      The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2, with further explanations provided in Guidance Notes (see Supplementary Information, item FC-(v), in Part B of Volume 4). Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.5 inclusive. Additional requirements apply where a licensee is relying on a professional intermediary to perform certain parts of the customer due diligence process: these are detailed in Section FC-1.6. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.8.

      Amended: January 2007