How can a financial institution verify the nature and purpose of a business and its legitimacy?

Question

Options

• ABy reviewing a copy of the corporation's latest audited reports and accounts
• BBy undertaking a company search or other commercial inquires to see that the institution has not
• CBy reviewing the company's website
• DBy using an independent information verification process, such as by accessing public and private

• A
  14% (6)
• B
  7% (3)
• C
  5% (2)
• D
  75% (33)

Explanation

A financial institution can verify the nature and purpose of a business and its legitimacy by using an independent information verification process, such as by accessing public and private databases. This method can help the financial institution to check the names of businesses against anti-money laundering (AML) watchlists, parse and analyze ownership information to determine beneficial ownership structure, and run the beneficial owners themselves through identity verification and AML watchlist checks. This can also help the financial institution to comply with the regulatory requirements for customer due diligence (CDD), which include obtaining and analyzing sufficient customer information to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile. Other methods, such as reviewing a copy of the corporation's latest audited reports and accounts, undertaking a company search or other commercial inquiries, or reviewing the company's website, may not provide sufficient or reliable information to verify the nature and purpose of a business and its

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