Initial Client Due Diligence

Initial client due diligence (CDD) is where you assess a client's money laundering and terrorism financing (ML/TF) risk, verify the client and their related parties, and decide whether to proceed with the relationship. Firm Verify guides you through this in a five-step wizard and generates an Initial CDD record when you finish.

Contents

1. Start an initial CDD
2. Step 1: Summary & initiation
3. Step 2: Risk assessment
4. Step 3: Identity verification
5. Step 4: Related parties
6. Step 5: Determination
7. Generate the Initial CDD record
8. Track initial CDD activity in the audit log

1. Start an initial CDD

From the main toolbar, select Clients.

From the Clients screen, you can start an initial CDD in either of these ways.

Option 1: From the client list

1	Search for the client.
2	Select the three dots in the Actions column, then select Start Initial CDD.

Option 2: From Start

1	Select Start.
2	On Starting initial CDD check for a client, select Start, then search for the client.

This opens the Initiate CDD wizard, which has five steps:

1. Summary & Initiation
2. Risk Assessment
3. Identity Verification
4. Related Parties
5. Determination

Use Next and Previous to move between steps. Select Cancel to leave the wizard.

To save your progress and come back to an in-progress CDD later, select Save for later.

2. Step 1: Summary & initiation

Review the client's details and select the designated services you'll provide and the delivery channels you'll use. This step shows:

• Client details
• Related parties (if any)
• Documents
• Services profile - designated services and delivery channels
• Initial CDD commenced date

3. Step 2: Risk assessment

Assess the client's inherent risk across four areas. Firm Verify prefills the risk assessment based on the information you've entered, but you can change any rating and add notes or mitigation for each factor.

Risk dimension summary

Below the risk factor tables, each of the four dimensions (client, service, delivery channel and country) is summarised into a single rating. Confirm each dimension rating.

Derived rating and CDD level

Firm Verify calculates the derived risk rating automatically. It's the highest of the four dimension ratings, and it sets the required CDD level:

4. Step 3: Identity verification

Verify that the client entity legally exists. Add your verification documents and record the outcome for each. You must complete this step before you can continue.

Select Add document, then choose Select from Client documents or Upload new file from device.

For each document, you can record:

• Document name and document type
• Verification method and verified outcome
• Verified by and verified date
• Notes (optional)

5. Step 4: Related parties

Verify each beneficial owner, key position holder and representative linked to the client. To add a related party, select Add Related Party.

For each related party:

• Verification documents - add documents to verify the party's identity, with the same details as in step 3.
• Representatives - confirm whether the representative's authority is confirmed. If it isn't, record the details.
• Screening - screening is manual and required for every related party. Record a result for PEP match, Sanctions match and Adverse media: No match, Potential match or Confirmed match.

6. Step 5: Determination

Review the outputs of the previous steps and make your final decision on the client.

Field	What to do
Final risk rating	Prefilled from the derived rating in step 2. Override it if your assessment differs. If you override it, you must enter a reason.
Required CDD level	Set by the final risk rating: High = Enhanced, Medium = Standard, Low = Simplified.
Determination	Choose Proceed with the relationship, Proceed with conditions or Do not proceed.
Outcome rationale	Required. Explain the reason for your determination (at least 10 characters).
Determined by and determination date	Record who made the determination and when.

7. Generate the Initial CDD record

Once you've completed all five steps, select Generate to finalise the CDD.

Firm Verify creates the Initial CDD record, a point-in-time compliance document of the client's CDD, for review sign-off and your AML/CTF audit trail.

The record includes:

• Client information - the fields shown depend on the client type (individual, sole trader, company, trust, SMSF, partnership, association or governing body).
• Services profile - designated services and delivery channels.
• ML/TF risk assessment - each risk factor table, the country risk table, the four dimension ratings, and the derived rating and required CDD level.
• Entity identity verification - your verification documents, or the result summary if the client was verified through Identity Verification (BGLiD).
• Related parties - each party's details, representative authority, verification and screening results.
• Determination - final risk rating and any override reason, CDD level applied, outcome, rationale, who determined it and when.
• The date the record was generated.

8. Track initial CDD activity in the audit log

Initial CDD activity is recorded on the Audit Log screen. To see only initial CDD entries, select Client - Initial CDD in the Module filter.

Each entry shows when the action happened, who performed it, the module (Client) and the entity type (Initial CDD). Save and Update entries show the before and after values of fields you changed, so you can see exactly what was updated. For privacy, determination details such as the final risk rating, CDD level, outcome and rationale are redacted in the audit log.