Know Your Customer (KYC) Policy

1. Purpose & Objectives

This KYC policy establishes the framework for understanding customer identity, business activities, and risk profiles. Our objectives are to:

Verify customer identity and beneficial ownership
Understand nature and purpose of customer relationships
Assess customer risk and suitability
Monitor ongoing customer activity
Comply with regulatory requirements
Prevent fraud and financial crime

2. KYC Process Overview

Stage 1: Initial Collection (At Signup)

Information Required	Purpose	Verification Method
Full Legal Name	Identity verification	Government ID
Date of Birth	Age verification (18+)	ID document
Residential Address	Location verification	Utility bill, bank statement
Email & Phone	Contact verification	Confirmed during signup
Social Security / Tax ID	Tax identification	Database verification
Employment Status	Income verification	Self-declaration

Stage 2: Documentation (Days 1-30)

Customer must provide:

Government-Issued ID: Passport, driver's license, national ID
Proof of Address: Utility bill, mortgage statement, lease agreement (within 3 months)
Source of Funds: Bank statement, pay stub, investment account confirmation
Additional Info: Employment verification if high-risk profile

Stage 3: Verification (Days 1-60)

Third-party verification against public records
Address verification
Beneficial ownership verification (if corporate account)
Sanctions screening (OFAC, EU, UN lists)
PEP (Politically Exposed Person) screening

Stage 4: Ongoing Monitoring (Annual/Continuous)

Transaction monitoring for unusual activity
Annual re-verification of identity
Updated risk assessment
Periodic relationship review

3. Customer Types & Requirements

3.1 Individual Customers (US Residents)

Risk Level: Low-Medium

Required	Optional
Name, DOB, Address SSN Photo ID Proof of Address	Occupation Income verification Employment details

Timeline: 30 days for basic verification

3.2 Foreign National / Non-Resident

Risk Level: Medium-High

Enhanced identity verification
Proof of legal US presence (visa, passport)
Source of funds (foreign currency/account)
Beneficial owner identification
Possible PEP screening

Timeline: 60 days for full verification

3.3 Corporate Customers

Risk Level: High

Required documentation:

Corporate registration documents
Articles of incorporation/bylaws
Certificate of good standing
EIN verification (US businesses)
Ownership structure (who owns 25%+)
Beneficial owner identification
List of directors/officers
Business purpose statement
Bank references

Timeline: 60-90 days for full verification

3.4 Trust & Estate Accounts

Required documentation:

Trust document copy
Trustee identification (individual or corporate)
Settlor information
Beneficial owner identification
Account purpose

3.5 Politically Exposed Persons (PEPs)

Risk Level: Very High

PEPs include:

Current/recent government officials
Senior military/judicial officers
State-owned enterprise executives
Close family members
Business associates

Action if Identified: Enhanced due diligence, possible account decline, senior management review

4. Document Verification Methods

4.1 Identity Verification

Manual Review: Examiner verifies photo and signature match customer
Database Check: Information matched against government databases
Biometric Verification: Photo comparison or facial recognition (if available)
Third-Party Verification: Professional identity verification service

4.2 Address Verification

Utility Bills: Must show name and address, within 3 months
Bank Statements: Official bank statement with address
Mortgage/Lease: Property ownership/lease documents
Government Mail: Tax notices, license renewal, benefit statements
Database Verification: Matched to public records

4.3 Document Rejection Criteria

Documents will be rejected if:

Expired (more than 5 years for ID)
Name doesn't match signup information
Address out of date (>3 months for address verification)
Quality too poor to read
Clearly forged or altered
From high-risk jurisdiction with inconsistent information

5. Risk Assessment

5.1 Risk Scoring Factors

Factor	Low Risk	Medium Risk	High Risk
Location	US resident	Other developed country	High-risk jurisdiction
Transaction Size	<$10,000	$10K - $100K	>$100K+
Account Activity	Typical pattern	Moderate unusual	Highly unusual
Customer Type	Individual resident	Small business	Corporation, PEP

5.2 High-Risk Jurisdiction List

Current list includes (updated regularly):

OFAC Designated Countries (Iran, Syria, Cuba, DPRK, Crimea)
High AML Risk Countries (per FATF Grey/Black List)
Countries with Limited AML Enforcement

Customers from these jurisdictions require Enhanced Due Diligence (EDD).

6. Beneficial Ownership Verification

6.1 Definition

Beneficial owner = any natural person who owns 25% or more of an entity's equity, voting rights, or profits.

6.2 Verification for Legal Entities

Obtain entity's ownership structure documentation
Identify all persons with 25%+ ownership
Verify identity of each beneficial owner
Conduct PEP/sanctions screening on beneficial owners
Document ultimate beneficial owner

6.3 Complex Structures

For complex ownership (nested companies, trusts, partnerships):

Trace ownership chain to natural person(s)
Enhanced diligence on intermediary entities
May require legal review
Senior management approval

7. Income & Suitability Verification

7.1 Income Verification Methods

W2 Employees: Recent pay stubs + W2 form
Self-Employed: Tax returns (last 2 years)
Retirees: Social Security or pension statements
Investment Income: Brokerage statements
Business Owners: Business financial statements

7.2 Suitability for Product Types

Based on income and experience, we may restrict access to:

Margin accounts (requires $25,000+ minimum)
Options trading (requires experience attestation)
Cryptocurrency (accredited investor verification)
Leverage products (high-risk investor acknowledgment)

8. Ongoing Monitoring

8.1 Regular Reviews

Annual: Update and verify customer information
Transaction Monitoring: Real-time for suspicious activity
Relationship Assessment: Does customer still fit our risk profile?
Sanctions Screening: Monthly re-screening against OFAC lists

8.2 Customer Due Diligence (CDD) Triggers

Immediately update KYC if customer:

Changes address (verify new address)
Changes employment status
Increases transaction volume significantly
Appears on sanctions list
Engages in unusual trading patterns
Requests high-risk product access

9. Failure to Complete KYC

9.1 Timeline

Account opened with basic information
30-day grace period to provide full documentation
After 30 days: Trading capabilities limited
After 60 days: Account may be closed

9.2 Account Restrictions

If KYC incomplete:

Cannot trade or invest
Cannot withdraw funds
Can only accept inbound deposits
May be subject to account closure

10. Privacy & Data Protection

All KYC information is:

Protected by privacy laws and our Privacy Policy
Not shared for marketing purposes
Shared only with regulatory authorities as required
Encrypted and securely stored
Subject to data retention requirements

11. Staff Training

All customer-facing staff receive:

Annual KYC/AML training
Document verification techniques
Red flag recognition
Fraud and forgery detection
Privacy and data security requirements

12. Compliance & Questions

KYC Compliance Team:
Email: kyc@investhub.example.com
Phone: +1-555-0100
Expected Response: 1-2 business days