Q&As

What CDD checks should be applied to a pooled account?

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Published by a LexisNexis Financial Services expert
Published on: 21 August 2017
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What is CDD?

Customer Due diligence (CDD) is a package of measures which credit institutions (such as banks), other financial institutions and other regulated entities are required to apply to their customers to ensure, as far as practicable, that the financial system is used only by bona fide persons for bona fide purposes.

CDD is also known as know your customer (KYC).

In the UK, CDD Requirements are set out in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (2017 MLRs), which implement the Fourth Money Laundering Directive (EU) 2015/849 (MLD4) and the Second Wire Transfer Regulation (EU) 2015/847 (WTR2) and entered into force on 26 June 2017. The 2017 MLRs replaced the Money Laundering Regulations 2007, SI 2007/2157 (2007 MLRs), which implemented the Third Money Laundering Directive 2005/60/EC (MLD3) in the UK.

What is a pooled account?

2017 MLRs, SI 2017/692, reg 37(5) defines a pooled account as an account into which monies are pooled and which is held by a customer

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Jurisdiction(s):
United Kingdom
Key definition:
Due diligence definition
What does Due diligence mean?

Due diligence means that all reasonable precautions were taken and all due diligence was exercised to avoid the commission of the offence. This requires the defendant to produce evidence of the system and procedures it has devised in an effort to avoid unfair practices.

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