CUSTOMER IDENTIFICATION AND VERIFICATION
Firms are required to have and follow reasonable procedures to verify the identity of their customers who open new accounts. These procedures must address the types of information the firm will collect from the customer and how it will verify the customer’s identity. These procedures must enable the firm to form a reasonable belief that it knows the true identity of its customers. In addition to the above, government regulations issued from time also require broker dealer firms to comply with KYC regulations as below.
Before opening an account, and on an ongoing basis, we will check to ensure that a customer does not appear on any government’s “Specifically Designated Nationals and Blocked Persons” List (SON List), and is not from, or engaging in transactions with people or entities from, embargoed countries and regions.
We will collect customer identification information from each customer who opens an account; utilize risk-based measures to verify the identity of each customer who opens an account; record customer identification information and the verification methods and results; provide notice to customers that we will seek identification information and compare customer identification information with government-provided lists of suspected terrorists, criminals or entities/individuals that are officially notified as prohibited.
Required Customer Information
Prior to opening an account, we will collect the following information for all accounts, if applicable, for any person, entity or organization who is opening a new account and whose name is on the account the name; date of birth (for an individual); an address, which will be a residential or business street address (for an individual), residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address), or a principal place of business, local office or other physical location(for a person other than an individual); an identification number, which will be a unique government/administrative authority issued identification number or one or more of the following:
a taxpayer identification number, passport number and country of issuance,
Alien identification number or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard.
In the event that a customer has applied for, but has not received, a valid and relevant identification number/document, we will request a copy of the application and obtain the corresponding identification number/document within a reasonable period of time after the ID is issued, following the account opening. When opening an account for a foreign business or enterprise that does not have an identification number/document, we will request alternative government-issued documentation certifying the existence of the business or enterprise.
Customers Who Refuse To Provide Information
If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our firm will not open a new account and, after considering the risks involved, consider closing any existing account. In either case, our AML Compliance Officer will be notified so that we can determine whether we should report the situation to regulators/government agencies.
Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers. In verifying customer identity, we will analyze any logical inconsistencies in the information we obtain. We will verify customer identity through documentary evidence, non-documentary evidence, or both. We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non documentary means described below whenever possible. We may also use such non-documentary means, after using documentary evidence, if we are still uncertain about whether we know the true identity of the customer. In analyzing the verification information, we will consider whether there is a logical consistency among the identifying information provided, such as the customer’s name, street address, postal code, telephone number (if provided), date of birth, and identification number/document.
Appropriate documents for verifying the identity of customers include, but are not limited to, the following:
For an individual, an unexpired government-issued identification evidencing nationality, residence, and bearing a photograph or similar safeguard, such as a driver’s license or passport; and
For a person other than individual, documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or a trust instrument.
We understand that we are not required to take steps to determine whether the document that the customer has provided to us for identity verification has been validly issued and that we may rely on a government-issued identification as verification of a customer’s identity. If, however, we note that the document shows some obvious form of fraud, we must consider that factor in determining whether we can form a reasonable belief that we know the customer’s true identity. We will use the following non-documentary methods of verifying identity:
Contacting a customer
Independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from a consumer reporting agency, public database, or other source;
Checking references with other financial institutions;
Obtaining a financial statement.
We will use non-documentary methods of verification in the following situations: (1) when the customer is unable to present an unexpired government-issued identification document with a photograph or other similar safeguard; (2) when the firm is unfamiliar with the documents the customer presents for identification verification; (3) when the customer and firm do not have face-to-face contact; and (4) when there are other circumstances that increase the risk that the firm will be unable to verify the true identity of the customer through documentary means.
We will verify the information within a reasonable time before or after the account is opened. Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may, pending verification, restrict the types of transactions or dollar amount of transactions. If we find suspicious information that indicates possible money laundering or terrorist financing activity, we will, after internal consultation with the firm’s AML compliance officer, file a SAR in accordance with applicable law and regulation.
We recognize that the risk that we may not know the customer’s true identity may be heightened for certain types of accounts, such as an account opened in the name of a corporation, partnership or trust that is created or conducts substantial business in a jurisdiction that is perceived, at the respective moment in time, a money laundering concern or has been designated as non-cooperative by an international body. We will identify customers that pose a heightened risk of not being properly identified. In such instances, we will take additional measures that may be used to obtain information about the identity of the individuals associated with the customer when standard documentary methods prove to be insufficient, such as obtaining information about individuals with authority or control over such account.
Lack of verification
When we cannot form a reasonable belief that we know the true identity of a customer, we will do the following: (A) not open an account; (B) impose terms under which a customer may conduct transactions while we attempt to verify the customer’s identity; (C) close an account after attempts to verify customer’s identity fail; and (D) file a SAR in accordance with applicable law and regulation.
We will document our verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancy in the identifying information. We will keep records containing a description of any document that we relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date. With respect to non-documentary verification, we will retain documents that describe the methods and the results of any measures we took to verify the identity of a customer. We will maintain a record of all identification information for one year after the account has been closed; we will retain records made about verification of the customer’s identity for one year after the record is made.
Comparison with Government Provided Lists of Terrorists and Other Criminals
From time to time, we may receive notice that a government agency has issued a list of known or suspected terrorists. Within a reasonable period of time after an account is opened (or earlier, if required by another government law or regulation or directive issued in connection with an applicable list), we will determine whether a customer appears on any such list of known or suspected terrorists or terrorist organizations issued by any government agency and designated as such by financial oversight agencies in consultation with functional regulators. We will follow all Federal directives issued in connection with such lists. We will continue to comply with global sanctions/government rules prohibiting transactions with certain foreign countries or their nationals, as and where applicable.
Notice to Customers
We will provide notice to customers that the firm is requesting information from them to verify their identities, as required by law in the case of there being a requirement for a customer to provide additional identifying information, over and above the information in our possession.
Any such notices shall be provided officially, after an initial notification via standard means of communication including but not limited to: E-mail, Fascimile, Recorded Telephonic Calls, Regular Post or any other suitable method of communication that clearly and demonstrably establishes our recorded request for additional customer identity information.