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CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS

A TAS platform in GIFT IFSC onboards Mehta Overseas Pte Ltd, a foreign buyer-side participant, whose beneficial owners cannot be identified. The platform's compliance officer asks what to do under financial crime compliance norms. Which course is correct?

The platform should not onboard Mehta Overseas until customer due diligence, including identification of beneficial owners, is completed. AML and CFT requirements apply to foreign participants too, and unverified self-declarations or post-transaction checks do not satisfy the obligation to know the customer before establishing the relationship.

  1. ADo not onboard until customer due diligence, including beneficial ownership identification, is completedCorrect
  2. BOnboard now and complete due diligence after the first financing
  3. COnboard because the participant is foreign and exempt from KYC
  4. DRely only on the participant's self-declaration without verification

Explanation

AML/CFT framework requires customer due diligence, including identifying beneficial owners, before establishing the relationship. Deferring checks, treating foreign status as exemption or relying solely on unverified declarations defeats the risk-based controls expected of regulated entities.

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