Due Diligence (DD) Documents Requirement

We serve a variety of clients. They are as follows:

  • Affiliate (Sub Marketing Partner)
  • MTO/MSB (Licensed Money Transfer Operator)
  • Correspondent Agents (Delivering Agent)

These clients have a different scope of work and so the requirement for their due diligence documents is also different. These clients and their requirements are broadly defined under the following headings:

Affiliate

Affiliate is a company that will be working as a sub marketing partner of the licensed MSB/MTO. Affiliate will have their own customer base or will market the MSB’s product to get transactions from a defined originating country and a destination Corridor. They will not have any money transfer service license and thus will not touch customer funds. Their only role in the business will be to generate transactions.

We will require the following sets of documents for an affiliate to check for their Due Diligence (DD):

  • Licensed Financial Institution &/or their lead Program Manager Due Diligence Forms
  • Certificate of Incorporation
  • Certificate of Registration
  • Certificate of Good Standing (If US entity)
  • By-Laws
  • Organization Structure (For Shareholding details)
  • Management Chart
  • AML Policy
  • AML/KYC Training Certificates
  • Latest Audited Financial Statements
  • Bank Reference letter
  • Passport Copies of Shareholders holding more than 10% shares
  • Personal background form (for shareholders holding more than 10% shares
  • If another company holds more than 10% shares of the client company, we need to perform Due Diligence on that company as well.

For an international company, if these documents are in languages other than English, we need to collect translated and notarized copy of such documents.

MTO/MSB

MTO/MSB stands for Money Transfer Operators and Money Service Business. These are companies that are licensed in the originating country for doing remittance as a business. The due diligence documents required for MTO or an MSB are as follows:

  • Licensed Financial Institution &/or their lead Program Manager Due Diligence Forms
  • Certificate of Incorporation
  • Certificate of Registration
  • By-Laws
  • Certificate of Good Standing (if US Entity)
  • Organization Structure ( For Shareholding details)
  • Management Chart
  • License Copy of the states licensed
  • AML Policy
  • AML/KYC Training Certificates
  • Latest Audited Financial Statements
  • Independent Audit Report
  • Bank Reference letter
  • Passport Copies of Shareholders holding more than 10% shares
  • Personal background form (for shareholders holding more than 10% shares

If another company holds more than 10% shares of the client company, we need to perform Due Diligence on that company as well.

Correspondent Agent

Correspondent agent is a company that has a permit or a license to deliver transactions in the destination corridors. The due diligence documents required for these type of clients are as follows:

  • Licensed Financial Institution &/or their lead Program Manager Due Diligence Forms
  • Certificate of Incorporation
  • Certificate of Registration
  • License copy (to deliver transactions in the destination corridors)
  • By-Laws
  • Organization Structure (For Shareholding details)
  • Management Chart
  • AML Policy
  • AML/KYC Training Certificates
  • Latest Audited Financial Statements
  • Bank Reference letter
  • Passport Copies of Shareholders holding more than 10% shares
  • Personal background form (for shareholders holding more than 10% shares
  • If another company holds more than 10% shares of the client company, we need to perform Due Diligence on that company as well.

For an international company, if these documents are in languages other than English, we need to collect translated and notarized copies of such documents.

Exceptions on the required documents for Affiliates:

There are some exceptions for the due diligence documents for an affiliate. They are as follows:

  • Audited Financials: An affiliate might be a newly registered company. Thus, they may not have audited financial statements. Also if a company has registered but has not started its operations, then they will not have any audited financial statements. Thus it is not necessary for those types of companies to submit their latest financial statements.
  • AML/KYC Policies: An affiliate will not have any regulatory requirement to have a KYC/AML Policy. However, even if it is not a requirement from the regulatory bodies, they need to have some knowledge of the AML and KYC regulations. Thus, it is mandatory to appoint a staff member as a compliance manager who will look after transaction monitoring. This is required as the affiliate will be their user’s first point of contact. They will need to monitor transactions as they will be bearing the risk of returns.

Note: This is a standard Due Diligence package. Apart from these, the clients will have to fill up additional MSB’s own Due Diligence forms and there might be few additional documents required based on the MSBs involved.

This page was last updated on December 14, 2020.

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