The Cyprus Securities and Exchange Commission (CySEC) has published Tuesday a Policy Statement on the enhancement of the non-face-to-face customer onboarding process with electronic methods (Policy Statement or PS-01-2024) to outline its new rules on digital onboarding.

According to a press release, CySEC’s Policy Statement has been finalised after taking into account the views expressed by stakeholders, in the context of the Public Consultation CP-02-2020, and the final version of the European Banking Authority Guidelines on the use of Remote Customer Onboarding Solutions under Article 13(1) of Directive (EU) 2015/849 that came into application in October 2023.

CySEC's new approach allows Obliged Entities, as defined by the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, to use remote onboarding solutions for verifying the identity of non-face-to-face customers based on a risk-based approach. These entities are required to carry out a risk assessment before using such solutions and must notify CySEC of their intent in advance.

The new rules also expand the definition of ‘identification document’ beyond passports to include a broader range of acceptable documents. While the obligation to collect documents confirming the customer’s address remains, the confirmation of address can now be achieved through remote onboarding solutions that collect copies of original documents.

These new rules aim to balance the facilitation of digital onboarding with robust risk management to prevent money laundering and terrorist financing.