Question & AnswerQ&A (BSP MEMORANDUM NO. M-2014-043)
The primary purpose is to protect the safety, soundness, and integrity of the Philippine financial system by ensuring all banks observe a prudent customer identification process.
Banks must verify the true identity of all their customers, including individuals, corporate and juridical entities, trustors, principals, beneficial owners, trustees, nominees, agents, or intermediaries.
The account must be under the true and full name of the account owner(s). The use of an alias is allowed only if it is duly registered with the relevant government agency pursuant to existing laws and regulations.
Banks must ensure that accounts are under the true and full name of the entity and develop systematic procedures to identify the legal existence, organizational structure, stockholders, partners, owners, directors, officers, and authorized signatories.
Banks must verify the authority and identification of all persons purporting to act on behalf of these entities.
These entities must comply with the rules applicable to individual customers, such as the true and full name identification requirement.
It primarily implements Section X806 and its subsections, particularly Subsection X806.1 regarding minimum procedures for customer identification.
Banks must establish the true and full identity of the trustors, principals, beneficial owners, as well as trustees, nominees, agents, or intermediaries involved.
To confirm that the entity is legitimate, to understand its structure, and to ensure proper identification and authority of persons acting for the entity, thereby preventing fraud and money laundering.
This ensures that aliases used in accounts are legally recognized and reduces risks of identity fraud or misrepresentation.