For files that require client verification, please ensure to inquire about the expected source of funds related to the transaction as well as the actual source of funds if the transaction proceeds. The source of funds is the economic activity or action generating the funds (e.g. savings from salary, insurance proceeds, inheritance, bank loan, proceeds from the sale of an asset, etc.) and may be apparent from the information obtained from the client for the retainer.

It’s important to record this information. You should also obtain and record the following information regarding the funds:

• the payer’s full name, occupation, and contact information
• the relationship of the payer to the client
• the date on which the funds were received from or transferred by the payer
• the form in which the funds were received or transferred (e.g. bank draft, cheque)
• the full name and address of all financial institutions or other entities through which the payer processed or transmitted the funds

Please ensure to make sufficient inquiries to assess whether there is anything that suggests the information about the source of funds, together with the proposed transaction, is inconsistent with what you know about the client, their occupation, economic profile, activities, and risk profile, and the circumstances of the transaction. You will also need to retain any supporting documents that relate to how the source of funds was determined.

Further guidance is available here.

Posted: 29 July 2026