Customer Identification for Banks

Section X806 of the Manual of Regulation for Banks (MORB) requires a system for verifying the true identity of customers.
Subsection X806.1 establishes minimum customer identification procedures that all banks must ensure.
For corporate and juridical entities, banks must verify not only identity but also legal existence and organizational structure, and the authority and identification of persons purporting to act for the entity.
The BSP memorandum functions as a reminder to banks to observe the MORB’s customer identification standards.

Banks must maintain a system that verifies the true identity of customers.
For corporate and juridical entities, banks must require verification of legal existence, organizational structure, and the authority and identification of authorized representatives.
Banks must apply these identification systems as minimum procedures under Subsection X806.1.
The memorandum targets the integrity of the financial system through prudent customer identification.

Banks must ensure that individual customers open accounts under the true and full name of the account owner(s).
Banks must ensure that corporate and juridical entities open accounts under the true and full name of the entity.
Banks must ensure that trustors, principals, beneficial owners, or persons on whose behalf the account is being opened establish their true and full identity.
Banks must ensure identity and authority verification for trustees, nominees, agents, or intermediaries acting for those persons.

Accounts for individual customers must be under the true and full name of the account owner or owners.
The use of an alias is allowed only if the alias is duly registered with the relevant government agency under existing laws and regulations.
Banks must therefore apply alias permission only where the required government registration exists.

Accounts for corporate and juridical entities must be under the true and full name of the entity.
Banks must develop a systematic procedure for identifying:
- corporate, partnership and sole proprietorship entities, and
- the stockholders/partners/owners, directors, officers, and authorized signatory/ies of these entities.
Banks must verify the legal existence and organizational structure of corporate and juridical entities.
Banks must verify the authority and identification of persons purporting to act on behalf of the corporate or juridical entity.

For trustors, principals, beneficial owners, or persons on whose behalf an account is opened, banks must establish their true and full identity.
Banks must also establish the true and full identity of trustees, nominees, agents or intermediaries pursuant to Subsection X806.1.e.1 of the MORB.
Banks must treat the beneficial owner/person on whose behalf the account is opened as part of the identification process.
The identification process extends to the intermediary acting capacity where relevant.

Associations, organizations, societies, groups or body of persons that are not duly registered with the Securities and Exchange Commission must comply with the rules applicable to individual customers.
The “individual customer” rules applied include the standard requiring accounts to be under the true and full name of the relevant account holder(s), subject to the alias registration rule where applicable.

All banks must ensure they maintain systems and procedures consistent with Section X806 and Subsection X806.1 of the MORB.
Banks must implement procedures that verify true identity and, for corporate and juridical entities, also verify legal existence and organizational structure.
Banks must implement systematic identification procedures for corporate and juridical structures and key persons, including authorized signatories.
Banks must implement the required identification approach for trust-related roles and beneficial ownership.

Nestor A. Espenilla, Jr., as Deputy Governor, issues the memorandum (signature: SGD NESTOR A. ESPENILLA, JR.).