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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
A new client wants to invest R200 000 today. She has no identity document with her and promises to bring it next week. The adviser is keen to secure the business. Which statement is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The FSP may not establish the relationship until it has verified her identity.Correct
- b) The FSP may proceed, because the funds come from a South African bank account.
- c) The FSP may proceed if she signs an affidavit confirming who she is.
- d) The FSP may invest the funds now and verify her identity within 30 days.
Why this is the answer
Customer due diligence must be carried out in the course of establishing the business relationship, before the relationship is established or the transaction concluded. The Act does not allow the identity check to be deferred for a set number of days, and another bank's dealings with her or her own affidavit do not replace verification.
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