• Verification of Identity and Source of Funds

    • FC-1.1.1

      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 licensee's senior management. They must be strictly adhered to.

      Amended: January 2020
      Added: October 2010

    • FC-1.1.2

      Licensees must implement the customer due diligence measures outlined in Chapters 1, 2 and 3 when:

      (a) [This Sub-paragraph was deleted in July 2018];
      (b) Carrying out wire transfers (of the equivalent of US$1,000 or above) (particularly relevant for money changers);
      (c) Establishing business relations with a new or existing customer;
      (d) A change to the signatory or beneficiary of an existing account or business relationship is made;
      (e) Customer documentation standards change substantially;
      (f) The licensee has doubts about the veracity or adequacy of previously obtained customer due diligence information;
      (g) A significant transaction takes place (see FC-2.2.3);
      (h) 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
      (i) There is a suspicion of money laundering or terrorist financing.
      Amended: January 2021
      Amended: July 2018
      October 2010

    • FC-1.1.2A

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

      Added: October 2017

    • FC-1.1.2B

      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 or 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.
      Added: October 2017

    • FC-1.1.2C

      Licensees 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

      Representative office licensees are not allowed to undertake business directly with customers. However, they may be assigned by the Head Office to contact new or existing customers on their behalf, in this case they must pay regard to (c) – (f) and (h-i) customer due diligence measures listed under FC-1.1.2 above.

      October 2010

    • FC-1.1.4

      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 1.10. For the representative office licensees, 'customer' includes customers of the HO that the Representative office liaises with for general purposes. Examples might include general inquiries and inquiries regarding the accuracy of customer information.

      October 2010

    • FC-1.1.5

      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 and in the Guidance Notes (See Supplementary Information, FC-7 in Part B of the Rulebook). Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.9 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-1.7. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.10.

      October 2010

    • FC-1.1.5A

      [This Paragraph was deleted in October 2023].

      Deleted: October 2023
      Added: January 2021

    • FC-1.1.5B

      Money changers must not register persons identified as having high-risk profiles, including those whose CPR has expired, for the purposes of the use of online channels or applications, without conducting the enhanced due diligence requirements outlined in Section FC-1.3.

      Added: January 2021