COMPLIANCE & RISK FRAMEWORK
The pages below describe the compliance system Verax is building to meet the FCA Small Payment Institution authorisation standard. Verax Systems Ltd is not currently authorised; nothing here should be read as a statement of the firm's current regulatory status.
Scope. The four-step framework is a designed process. It runs today only against our internal test environment. No live customer onboarding or transaction monitoring is performed by Verax. Once authorised, the same framework will be operated by our named MLRO (SMF17) and subject to FCA supervision.
Multi-layered risk-based approach
The framework implements a four-step risk-based approach (RBA) aligned with MLR 2017, JMLSG guidance and the FCA Financial Crime Guide. Every corporate entity is designed to pass through the four steps before any API keys would be issued, post-authorisation.
Identity & Corporate Verification (KYC/KYB)
- Automated extraction of corporate registry data (Companies House, North Data).
- Biometric liveness checks for all Ultimate Beneficial Owners (UBOs) holding >25%.
- Verification of corporate structure and proof of active status.
Global Sanctions Screening
- Real-time cross-referencing against UK HMT, OFAC, EU, and UN sanction lists.
- PEP (Politically Exposed Persons) screening and adverse media checks.
- Zero Tolerance Policy: We strictly block entities from high-risk jurisdictions.
Source of Validation (SoV) Analysis
- Algorithmic validation of transaction economic rationale.
- For high-volume flows, we require documentary evidence (invoices, contracts) to verify the origin of the underlying transactions.
Continuous Transaction Monitoring
- AI-driven agents monitor post-onboarding activity for anomalies.
- Automated freezing of processing upon detection of suspicious patterns (structuring, velocity spikes).
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