(Guideline Chapter 5)

Where SDD applies, GRDA is not required to identify and verify the

BENEFICIAL OWNER. However, other aspects of CDD must be undertaken and it is still necessary to conduct ongoing monitoring of the business relationship. GRDA must have solid grounds to support the use of SDD and may have to demonstrate these grounds to the Registrar.


simplified due diligence

To whom may SDD be applied?

Pursuant to section 4(3) of Part 2 of Schedule 2 to the AMLO, customers to whom SDD may be applied are:

  1. financial institution;
  2. an institution that :
    1. is incorporated or established in an equivalent jurisdiction;
    2. carries on a business similar to that carried on by a financial institution;
    3. has measures in place to ensure compliance with requirements similar to those imposed under Schedule 2; and
    4. is supervised for compliance with those requirements by an authority in that jurisdiction that performs functions similar to those of any of the RAs;
  3. a corporation listed on any stock exchange;
  4. an investment vehicle where the person responsible for carrying out measures that are similar to the CDD measures in relation to all the investors of the investment vehicle is- 
    1. a financial institution;
    2. an institution incorporated or established in Hong Kong, or in an equivalent jurisdiction that-
      1. has measures in place to ensure compliance with requirements similar to those imposed under Schedule 2; and
      2. is supervised for compliance with those requirements.
  5. the Government or any public body in Hong Kong; or
  6. the government of an equivalent jurisdiction or a body in an equivalent jurisdiction that performs functions similar to those of a public body.

What customer information GRDA needs under SDD?

GRDA is required to :

  1. identify the customer and verify the customer’s identity;
  2. if a business relationship is to be established and its purpose and intended nature are not obvious, obtain information on the purpose and intended nature of the business relationship with GRDA; and
  3. if a person purports to act on behalf of the customer,
    1. identify the person and take reasonable measures to verify the person’s identity; and
    2. verify the person’s authority to act on behalf of the customer.

How to ascertain whether SDD is applicable ?

To ascertain whether a customer is eligible for SDD, GRDA would:

  1. verify that the customer is a financial institution or institution on the list of authorised (or supervised) financial institutions in the jurisdiction concerned;
  2. obtain proof of listed status on a stock exchange; or
  3. ascertain that the person responsible for carrying out measures that are similar to the CDD measures in relation to all the investors of the investment vehicle falls within any of the categories of institution set out in section 4(3)(d) of Part 2 of Schedule 2 to the AMLO.