What are the Simplified Due Diligence measure?

The SDD measures may include but are not limited to:
1. Adjusting the timing of CDD where the product or transaction sought has features that limit its use for ML/TF purposes, e.g.
i. Verifying the customer’s or beneficial owner’s identity during the establishment of the business relationship; or
ii. Verifying the customer’s or beneficial owner’s identity once transactions exceed a defined threshold or once a reasonable time limit has lapsed. Regulated person must make sure that:

a) this does not result in a de facto exemption from CDD, that is, firms must ensure that the customer’s or beneficial owner’s identity will ultimately be verified;
b) the threshold or time limit is set at a reasonably low level (although, with regard to terrorist financing, RP should note that a low threshold alone may not be enough to reduce risk);
c) they have systems in place to detect when the threshold or time limit has been reached; and
d) they do not defer CDD or delay obtaining relevant information about the customer where regulations requires that this information be obtained at the outset.

2. Adjusting the quantity of information obtained for identification, verification or monitoring purposes, for example by:
i. verifying identity on the basis of information obtained from one reliable document or data source only; or
ii. assuming the nature and purpose of the business relationship because the product is designed for one particular use only,
3. Adjusting the quality or source of information obtained for identification, verification or monitoring purposes;

4. Adjusting the frequency of CDD updates and reviews of the business relationship, for example carrying these out only when trigger events occur such as the customer looking to take out a new product or service or when a certain transaction threshold is reached; firms must make sure that this does not result in a de facto exemption from keeping CDD information up-to-date;
5. Adjusting the frequency and intensity of transaction monitoring, for example by monitoring transactions above a certain threshold only.