Client onboarding for CySEC regulated entities

Simply put, client onboarding is the process of welcoming new clients into your business. However, before accepting and onboarding any new clients into your business, it is your organisation’s responsibility to collect and evaluate the appropriate information and documentation.

What are the main elements you need to consider when onboarding a new client?

The collection and assessment of information and documentation is known as Customer Due Diligence (CDD). As part of the CDD process, Know your Customer (KYC) and AML checks take place to verify the client’s identity and to ensure they are clear of any money laundering or terrorist financing (ML/TF) acts. These procedures are significant to the client onboarding process and must be performed diligently by CySEC regulated entities such as Cyprus Investment Firms (CIF), Alternative Investment Funds (AIF), and Crypto-Asset Services Providers (CASP).

During the onboarding process, Cyprus Investment Firms and other CySEC regulated entities begin to build the economic profile of the client. The economic profile will help the CIF gauge the risks associated with the client and help understand whether their investment products and services are suitable and appropriate for the client. Thus, for any new client that is successfully accepted and onboarded to engage with products and services, the responsibility always lies with the CySEC regulated entity.

Furthermore, the ongoing monitoring and record keeping are essential facets for ensuring the client profile remains current as per the information provided upon the client onboarding process and ensuring compliance with the CySEC regulatory requirements. The continuous monitoring of clients is also known as perpetual CDD which has become a cornerstone for successful investment firms.

Moreover, in today’s rapidly developing financial landscape including the surge in crypto-asset trading, investment firms such as CASP and VASP (Virtual Asset Service Providers) amongst other regulated entities, must ensure they have robust ongoing monitoring systems in place to verify client transactions, as these are known as Know your Transaction (KYT). These systems safeguard the security and reputation of a CASP and other CySEC regulated entities by making sure they are continuously aware of their clients’ information including the legitimacy of their funds.

The Client Onboarding AML, KYC & CDD course has been developed by SALVUS Funds and is delivered by their Risk & Compliance Director, Evdokia Pitsillidou. This course is designed to equip professionals working at CIF, CASP, and other CySEC regulated entities, with the necessary knowledge concerning the onboarding process of new clients and the applicable regulatory requirements.

By undertaking this complete client onboarding course, learners will refine existing skills as well as obtain new competencies. By taking into consideration CDD, KYC and AML requirements, learners will gain the knowledge to make an impact in their organisation by helping enhance company policies, procedures, and controls related to client onboarding.

The syllabus of the client onboarding course includes:

• Money Laundering (ML), the stages and methods of ML,
• The AML Regulatory Framework,

• Assessing and Managing Risks – Risk Based Approach (RBA),

• Know your Customer (KYC) and Customer Due Diligence (CDD),

• Client Appropriateness & Target Market,
• Client Onboarding Process,
• AML Risk Scoring, and
• Ongoing Monitoring and Record Keeping.

The abovementioned client onboarding course material is available in both PDF slides as well as via online video recordings, that are suited for self-paced learning. Hence, learners undertaking the course have the flexibility to learn wherever and whenever.

Additionally, learners have the opportunity to test their newly acquired knowledge through test questions based on the material covered.

Upon completion of the Client Onboarding AML, KYC & CDD course, learners can claim a digital certificate that counts toward the Continuous Professional Development (CPD) annual requirements CySEC certified professionals must meet.