Definitions
This page outlines definitions of the following terms:
1. Source of Funds
The term ’source of funds’ is referring to the activity that generates the funds for a particular business relationship or transaction.
Why and when do we need this information?
As a regulated provider of a range of fiduciary and corporate services, Harneys Services, is required to obtain information on the source of funds in respect of beneficial owners with a vested interest, investors, clients of record, and/or applicants for business.
2. Source of Wealth
Source of wealth describes the activity/ies that have generated the total net worth (assets and property) of a person.
Why and when do we need this information?
As a regulated provider of corporate services, Harneys Services is required to obtain information on the source of wealth in respect of a number of scenarios; for example when dealing with politically exposed persons or high/ultra‐high net worth individuals.
3. Politically Exposed Person (PEP)?
Definition provided by Financial Action Task Force (www.fatf‐gafi.org)
“Individuals who are or have been entrusted with prominent public functions in a foreign country, for example, Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves. The definition is not intended to cover middle ranking or more junior individuals in the foregoing categories.”
A PEP may be domestic or foreign and generally comprise of persons (including family members and close associates) who are:
- Heads of State or members of the government;
- Cabinet ministers;
- Secretaries of state;
- Judges (including magistrates where they exercise enormous jurisdiction);
- Senior political party functionaries;
- Lower political party functionaries with an influencing connection in high ranking government circles;
- Military leaders;
- Heads of police and national security service;
- Senior public officials;
- Heads of public utilities/corporations;
- Members of ruling royal families; and
- Senior representatives of religious organizations where their functions are connected with political, judicial, security, or administrative responsibilities.
For further reading, please refer to PEP Guidance issued by the Financial Action Task Force (FATF).
4. High Net‐Worth Individual (HNWI)?
An HNWI is an individual with large personal financial holdings or financial assets worth more than US$5 million.
5. What is an Ultra‐High Net‐Worth Individual (UHNWI)?
A UHNWI is an individual with large personal financial holdings or financial assets worth more than US$30 million.
6. Approved Persons
An 'approved person' is an individual that has been approved by the relevant regulator to do one or more activities for an authorised firm. This person has to know and meet our regulatory requirements, as well as understand how they are applied. If you are to use this exemption for KYC, you should provide evidence of regulatory approval.