Question 1

What is Customer Due Diligence (CDD)?

Accepted Answer

CDD is the process of identifying a customer and verifying that identity from independent and reliable sources, identifying any beneficial owner, understanding the nature and purpose of the business relationship, and conducting ongoing monitoring. It is a foundational obligation for all reporting...

Question 2

What is the difference between CDD, EDD and SDD?

Accepted Answer

| Tier | When applied | Required steps |

Question 3

When is EDD mandatory?

Accepted Answer

Across most regimes, EDD is mandatory for:

Question 4

What is "source of funds" vs "source of wealth"?

Accepted Answer

Source of funds is the origin of the specific monies used in a transaction or relationship (e.g. salary credit, sale proceeds, loan drawdown). Source of wealth is the origin of the customer's *total* assets and net worth (e.g. inherited family business, decades of professional earnings, equity fr...

Question 5

When can SDD be applied?

Accepted Answer

Only where the regime explicitly permits and where a documented risk assessment supports a low-risk conclusion. Typical low-risk scenarios include listed companies subject to disclosure requirements, public administrations, customers with very low-value or low-functionality products (e.g. capped...

Customer Due Diligence (CDD, EDD, SDD)