What are Politically Exposed Persons (PEPS)
A politically exposed person is someone who has been involved with prominent public activity, or someone who is closely related to such a person. Before an account can be opened, a PEP screening must be carried out, which is also known as initial due diligence.
To learn more about what is required when dealing with PEPs, and other important activity that must be carried out by your forex or financial institution, please Contact DeltaQuest.
Politically exposed persons explained
PEPs are individuals who are considered high risk in today’s regulatory environment. PEPs, their family members, close associates and others connected to them are continuously monitored by compliance regulatory bodies to ensure that their funds are not derived from corrupt sources.
Once an initial due diligence test has been carried out by a company and it has been realized that the customer is a politically exposed person, the institution is expected to deal with the client in the correct manner. For financial companies who carry out business with PEPs, enhanced due diligence must be carried out, particularly when such individuals become involved with any activity related to private banking.
Before conducting business with a PEP it is important to carry out thorough KYC (know your customer) procedures and enhanced due diligence processes. This is because a PEP generally presents higher risk and it is therefore important to perform advanced monitored checks on them and all accounts connected to them.
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