OAK Investment Advisers Ltd has a new client Olive who refuses to supply requested information to verify her identity. What must OAK do?

• A. Ask Olive to nominate a friend of hers who is prepared to verify Olive's identity.
• B. Not provide any further service for Olive and terminate the business relationship immediately.
• C. Send a final formal written request to Olive for the relevant information, by registered post.
• D. Make an immediate report about Olive to the Central Bank's Money Laundering Unit.

Answer: (B)

Verifying a client’s identity is a fundamental part of due diligence. When a client refuses to provide the information needed to verify who they are, the firm cannot safely or lawfully continue the relationship or provide services. Without identity verification, the firm cannot assess risk, meet regulatory obligations, or detect and prevent money laundering or other crimes. Therefore, the appropriate action is to stop providing services and terminate the relationship with the client, while documenting the refusal and the steps taken.

The other options don’t fit the regulatory requirements. Asking the client to nominate a friend to verify identity is not an approved or ethical way to satisfy due diligence. Sending a final written request after the client has already refused adds delay without resolving the issue and would not override the need for verification. Reporting to the Central Bank’s Money Laundering Unit is reserved for situations where there is suspicion of money laundering or financing of crime, not merely a refusal to supply information.