A new client refuses to supply requested information to verify identity; what must the firm do?

• A. Ask the client to nominate a friend of theirs who is prepared to verify their identity.
• B. Not provide any further service for the client and terminate the business relationship immediately.
• C. Send a final formal written request to the client for the relevant information, by registered post.
• D. Make an immediate report about the client to the Central Bank's Money Laundering Unit.

Answer: (B)

Identity verification and customer due diligence are required before establishing a new relationship. If a client refuses to supply the information needed to verify who they are, you cannot complete the verification process or lawfully begin providing services. The compliant action is to stop offering any services and terminate the relationship. This protects against non-compliance with AML/KYC rules and the risks of facilitating unidentified activity. Reporting to the regulator would only be appropriate if there were grounds to suspect money laundering or related illicit activity; a mere refusal to provide information does not by itself create that trigger.