Onboarding / KYC for lenders
Portfolio Managers can configure permissioned pools on TrueFi. Accordingly, some pools on TrueFi may require identity verification before lenders can gain access.
Lenders can get access to permissioned pools by clicking on the "Get access" button on the pool's page. This will route the user to verify their identity with an external provider, as defined by the portfolio manager's policy.
Example: How to get access to permissioned portfolios
In order to be compliant with regulations in certain jurisdictions, Portfolio Managers must verify a user’s identity before and while doing business with them.
This is in an effort to maintain the integrity of the pool. The KYC process is a first line of defense against fraud, sanctions evasion, and terrorist financing. Compliance with global KYC standards helps ensure the pool against reputational risk, regulatory fines, and even cease and desist orders.
Users are required to provide credentials that prove their identity and address. Verification credentials can include ID card verification, face verification, biometric verification, and/or document verification. For proof of address, utility bills and bank statements are examples of acceptable documentation.
This process is important for determining users' risk and whether they can meet the Portfolio Manager’s requirements to use their services. Moreover, it’s also a legal requirement to comply with Anti-Money Laundering (AML) laws in certain jurisdictions.
US regulations specify certain requirements, including licenses, that Portfolio Managers need to meet in order to offer investment opportunities to US persons (citizens or legal residents) and entities.
Failing to comply with such regulations would make Portfolio Managers subject to liability, which would severely impact the pool.