Swift aids funds in fight against crime

Personal data protectionSwift, a bank-owned messaging platform, is to help the funds industry comply with know-your-customer (KYC) rules by extending access to its database of entities involved in financial transactions.

The KYC Registry, which is being opened to fund distributors and custodians, holds a standardised set of data and documentation that are needed to identify counterparties and fulfill KYC obligations.

KYC rules require corporations to identify clients and are intended as a barrier against bribery and corruption, and to hinder organised crime or terrorist groups.

Users of the registry contribute an agreed set of baseline data and documentation for validation by Swift, which the contributors can then share with their counterparties. All registry users retain full ownership of their KYC information, along with control over who can access the data via a secure online platform.

"Fund distributors and custodians face similar challenges to banks with KYC due diligence,” says Mark Gem, head of compliance at Clearstream, a securities depositary, and chair of the Swift’s securities compliance working group.

Previously, Swift only offered the KYC Registry to correspondent banks.

Swift launched the registry in December 2014 to help financial institutions conduct counterparty due-diligence in a more timely and cost-effective way than with other KYC processes. The registry includes entities from 110 countries.

Paul Taylor, director of compliance services at Swift, says the organisation is looking at broader ways of addressing financial crime compliance, including screening services.

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