All RE5 questions
FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
Under the FIC Act, when must an accountable institution establish and verify a new client's identity?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) As part of customer due diligence, before or when establishing the business relationship or concluding a single transaction.Correct
- b) Only after the first year of dealing with the client has elapsed.
- c) Only if the client volunteers that they wish to be verified.
- d) Never — verification is the bank’s job, not the FSP’s.
Why this is the answer
Customer due diligence (KYC) requires identifying and verifying the client (and beneficial owners) before, or at the point of, establishing a business relationship or doing a single transaction. It is an ongoing obligation, not a once-off afterthought.
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