All RE5 questions
FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
Customer Due Diligence (CDD) requires an FSP to identify and verify the client's identity. When must the FSP generally perform CDD?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Only when the client submits a complaint.
- b) Only for cash transactions over R25,000.
- c) Before establishing a business relationship or concluding a single transaction.Correct
- d) Every five years, regardless of new transactions.
Why this is the answer
The FIC Act (Sec 21) requires an Accountable Institution (FSP) to perform Customer Due Diligence (CDD) *before* establishing a business relationship or concluding a single transaction with a client. This is the 'Know Your Customer' (KYC) principle.
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