When an individual purchases a share in a racehorse via our Syndication Compliance service, we request specific personal details and verify the accuracy of those details against government and independent data sources.
As a racehorse trainer or other service provider, you effectively provide credit to your clients (owners). So at the very least, and identity and address check should be performed.
We believe this process helps protect the integrity of your business and aids the debt recovery process if required.
Why do we verify an buyer’s identity?
The Anti-Money Laundering and Counter Terrorism Financing Act 2006 (AML/CTF Act) imposes an obligation on Australian Financial Service Providers like us, to detect and deter money laundering and terrorism financing.
Our Customer Due Diligence procedures, often referred to as “Know Your Customer” (KYC) processes, assists the identification, mitigation and management of any Money Laundering and Terrorism Financing risk. But the benefits go far beyond compliance.
ALL businesses should undertake this due diligence. Racehorse Trainers in particular have a duty of care to verify the bona fides of their clients (owners of horses). You will be aware of a well-publicised cases recently, involving a leading trainer who was suspended for 6 months for not performing this diligence.
What information does a Buyer need to provide?
At a minimum we require the buyer’s full name, date of birth, driver’s licence number, and current residential address.
As an option, you may also like to request a verified picture of the Buyer (such as a scanned / photo of Drivers Licence or Passport).
What do we do with that information?
By using a reputable “fintech” service provider trusted by many banks, institutions and wagering providers, we attempt to verify the Buyer’s identity and residential address against reliable and trustworthy government and independent data sources.
This check can be manual (as it is now), or integrated into an Online Form for onboarding new owners (rolling out in 2018).
This service also checks that the Buyer is not listed on a global sanction, Politically Exposed Persons (PEP), fraudulent activity register or other watchlist.
When happens if the Buyer’s identity and/or address cannot be verified?
Around 90% of Buyers through our process are verified “first-time” via our solution’s background checks. But around 10% of Buyers are asked to provide additional proofs, usually because they have changed address recently and have not yet updated their Drives Licence or Electoral Roll.
We then contact the Buyer and offer them alternate options such as providing a Medicare Card number or a recent copy of a Bank Statement, Rental Agreement, Utilities Bill.
In the integrated online solution (to be implemented in 2019), this can all be performed online by the Buyer.
What if the Buyer can’t provide the proof needed?
By law, Buyers must provide satisfactory proof of identity and bona fides to become a racehorse owner. If they cannot do this, we cannot accept their application to purchase a share interest in the horse.
If we suspect a provided document has been forged, tampered with, cancelled or stolen, we will engage the appropriate authorities or authentication service to establish that this is the case, and if so will lodge a Suspicious Matter report.