What is PEP screening
PEP screening is the activity of screening individuals and companies to ensure that they have no connection to, or are not considered to politically exposed persons. Politically Exposed Persons are high risk individuals who have played a prominent role in politically activity.
To learn more about what is required when dealing with PEPs, and other important activity that must be carried out by your financial institution, please Contact DeltaQuest.
PEP screening explained
PEP screening is a way of obtaining valuable information about politically exposed persons, and is considered an important resource for forex companies if they are to be made aware of Politically Exposed Persons who wish to conduct business with their company.
For forex companies, Politically Exposed Persons are regarded as very high risk and thus the importance of carrying out enhanced due diligence in emphasized, by conducting stringent Anti-Money Laundering and Know Your Customer regulations. It is crucial for financial institutions to implement initial KYC checks to reveal if a person is politically exposed. This is a legal requirement and many regulatory bodies impose heavy penalties on those who do not correctly adhere to KYC procedures.
The purpose of carrying out PEP screening is to ensure that if the screening reveals a Politically Exposed Person (PEP), the company can ensure that their source of wealth is completely credible and that the individual will not pose a financial or reputational threat to the company.
PEP screening provides imperative information pertaining to the individual in question, along with information about their family members. This information is essential for a forex company to assess the level of risk attached to an individual identified as a PEP.
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