Verification and PSC reporting

Verification procedures help firms establish that the information they collect about a client is accurate and reliable. The checks a firm carries out should be appropriate to the risks identified and the nature of the client and business relationship.

Firms should tailor verification work to the specific risk, rather than relying on additional ID checks where the risk relates to other factors, such as high-risk third-country transactions.

• 4.2% of firms had not gathered enough evidence to manage of mitigate identified risks in their verification procedures.
• 3.2% of firms had not reported material discrepancies between information gathered for regulatory purposes and the PSC Register to Companies House or did not have policies and procedures in place for this type of reporting.

Firms should ensure their verification procedures are proportionate to the risks identified and supported by appropriate evidence.

Consider whether your procedures:

• Address the specific money laundering risks identified in your firm-wide and client risk assessments.
• Are appropriate to the client, the services provided and the nature of the business relationship.
• Include additional checks where necessary to manage identified risks.
• Clearly document the checks carried out, the evidence obtained and how the findings inform your risk assessment.

Firms must have procedures for identifying and reporting relevant discrepancies between information they hold about a person with significant control and information recorded on the Companies House PSC Register.

Ensure staff understand when a discrepancy should be reported, how to report it and how to record the action taken.

• Fact or fiction: Client identification and verification