Which of the following CDD items is intended to gather information about the purpose of the business relationship?

• A. Obtaining information on the purpose of the business relationship.
• B. Identifying a customer.
• C. Verifying the identity of the beneficial owner.
• D. Verifying address.

Answer: (A)

The item being tested is about collecting information on why the customer is entering the relationship and what activities are expected. Understanding the purpose helps the institution assess risk, set appropriate due diligence, and tailor ongoing monitoring to detect activity that doesn’t fit the stated purpose. The correct choice directly seeks information on the purpose of the relationship, which is the key aim of this CDD step. Other items focus on identifying who the customer is, who the beneficial owner is, or where the customer is located—matters of identity and contact details rather than the purpose of the business relationship. Knowing the purpose keeps monitoring aligned with what the relationship is intended to do, making it essential for effective risk management.