Navigating Counterparty Onboarding – Accelerating the Process

Onboarding a counterparty can often feel like a slow and cumbersome process.  Understanding why it takes time and knowing how to expedite it can make a significant difference. Let’s delve into the reasons behind the delays and explore some strategies to streamline the onboarding process.

Why Does it Take So Long?

  • KYC Complexity:

    Know Your Customer (KYC) requirements are not standardized globally. Counterparties operate in various jurisdictions with their own regulatory requirements, leading to varied KYC requests. Moreover, KYC standards are continuously evolving to reflect regulatory and market changes, requiring constant updates and adjustments.

  • Lack of Personnel, Siloed Products and Services, Manual Processes:

    In the banking industry, there is often a shortage of personnel dedicated to onboarding processes. Counterparties may outsource certain aspects of their operations, such as KYC verification, which can add time to the onboarding process. When onboarding multiple products and services, each department of the Counterparty has its own KYC processes and requirements for client information. The process can be quite manual, and this leads to delays.

How to Expedite the Onboarding Process

  • Preparation is Key:

    Ensure all necessary documents and information are readily available. This includes formation documents, tax forms, regulatory certifications and operating agreements as well as personal information. Being organized can significantly speed up the process.

  • AML Compliance:

    Anti-Money Laundering (AML) compliance is a crucial aspect of onboarding. Providing an AML letter from compliance, fund counsel, or your fund administrator can streamline the process by eliminating the need to fill out specific questionnaires.

  • authorized persons list:

    An incumbency certificate, which shows authorized signatories, can expedite the process by providing a clear breakdown of who is authorized to execute on behalf of an entity. Similarly, maintaining an Authorized Traders List simplifies the account set up process.

  • Third-Party Assistance and Software:

    Consider using a third party to assist in filling out forms correctly and navigating the AML process. Their expertise helps ensure everything is in order, speeding up the approval process.

    Some providers have a software tool to facilitate the exchange of KYC documentation which can increase both the security and efficiency of the onboarding process.

In conclusion, while onboarding a counterparty can be time-consuming, investment firms that implement efficient processes can reduce the time required to open accounts and respond to future requests.

How can quadrangle help

Using the QDS solution, that is purpose built for investment firms by KYC experts to ensure you are positioned for success to onboard counterparties in an evolving market, can be the key to streamlining your process.

Click below to request a call or demo to learn more about how QDS can benefit your firm.

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