Principles on Client Identification and Beneficial Ownership for the Securities Industry
Client and beneficial owner identification and verification, know your client, as well as the keeping of the related data are considered the Client Due Diligence process (CDD process). The CDD process is a key component of securities regulatory requirements intended to achieve the principal objectives of securities regulation, the protection of investors; ensuring that markets are fair, efficient and transparent; and the prevention of the illegal use of the securities industry. These objectives must be taken into account to their broadest extent when implementing requirements relating to the CDD process. From the perspective of securities regulators, the CDD process must be carried out by authorized securities service providers (ASSPs), to fulfill client and beneficial owner identification and verification, as well as know your client requirements. The Principles address the following areas: Client Identification And Verification; Omnibus Accounts (accounts established by and in the name of financial institutions in order to engage in securities transactions on behalf of their clients); Beneficial owner identification; Know your client (KYC); Record keeping; Third party reliance; Unsuccessful CDD process; Role of the regulator; Cooperation.