A KYC Working Group in Switzerland has drafted an ordinance on behalf of the Swiss Federal Banking Commission, calling for stricter, risk-based due diligence on politically exposed persons and tougher know your customer requirements for banks, securities dealers and fund management firms. The Working Group was composed of commercial bodies, banks, federal law enforcement agencies and regulators.
Financial firms are obliged already to apply basic KYC requirements but according to Dr. Urs Zulauf, Head of the Legal and Enforcement Department, the SFBC is asking that they first define what they consider to be customers with a higher risk, depending on the nature of their business against certain criteria. Every financial firm will be required to define these risk-based criteria for the client relationships, then submitting a “risk-based KYC plan” to the SFBC.
Firms will have until September, 2003 to submit a report describing how they’ll implement this ruling. The SFBC plans to issue a standard format for the required report, hopefully by next spring.