How does Enhanced Due Diligence (EDD) in KYC differ from Customer Due Diligence (CDD) in KYC ?
CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2019
How does Enhanced Due Diligence (EDD) in KYC differ from Customer Due Diligence (CDD) in KYC ?
Answer & Explanation:
Customer Due Diligence (CDD) refer to identifying and verifying the customer and the beneficial owner, CDD refers to the monitoring of clients and their activities to see if the client does not change its status over time. For example changes in the signatory of the account, changes in the partners, changes in the object, changes in the source of income, revenue etc. hence without CDD the services provider would not know that there is changes in the ownership. Whereas the Enhanced Due Diligence (EDD) refers to a rigorous and robust process of investigation over and above (KYC) procedures, that seeks with reasonable assurance to verify and validate the customers identity; understand and test the customers profile, business and account activity; identify relevant adverse information and risk assess the potential for money laundering and/or terrorist financing to support actionable decisions to mitigate against financial, regulatory and reputational risk and ensure regulatory compliance.
Topics: KYC
Related Questions in this Topic
- You are appointed as Compliance Officer of the company. One of the foreign investor in the company is hesitating to prov...
- Sudhir Mukherjee is a Company Secretary in Practice and he certifies the Annual Return of the XYZ Ltd. otherwise than in...
- Explain the procession of compounding application under FEMA, 1999 and the relevance of Personal Hearing.
- Explain the different theories and practices of Ethical Practices under the concept of Value, Ethics and Professional Co...
- The management of KDBC Ltd. appointed Girish as their Secretarial Auditor. What should an auditor keep in mind for the p...