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Who signed off on your last counterparty? Why approval should never be a one-person job
Who actually signed off on your last counterparty? If the honest answer is the same analyst who onboarded them, that is not a counterparty onboarding process. It is a single point of failure with a tidy folder of documents attached.
· 2 MIN READ · BY THE KYCK DESK
One person, one bad day
The analyst who collects the trade licence, runs the screening and builds the file is doing essential work. They should not also be the only person who approves the relationship. One rushed Friday afternoon, one missed match, one ownership layer nobody questioned, and a high-risk counterparty is live in your book with nobody else having looked at it.
Regulators call the fix separation of duties, or the four-eyes principle. The idea is simple: the person who prepares a decision and the person who takes it should not be the same.
What tiered approval changes
- Approval runs through tiers in an order you set, for example a compliance review followed by a finance check on bank details.
- Only the people assigned to the current tier can approve at that stage. Nothing moves to the next tier, or to approved, without a recorded decision.
- An administrator can step in when someone is away, but has to write down why, and the approval is marked as an override.
- Every step is recorded: who decided, at which tier, when and with what comment.
Four eyes by design, not by memory
Who sits in each tier is your decision. Keep the analysts who build files out of the tier that approves them, and four eyes stop depending on someone remembering to ask a colleague. They become a property of the system. And because a counterparty that resubmits changed details goes back to the first tier, a past approval never quietly covers a new set of facts.
Strong counterparty compliance is not about adding more forms. It is about making sure the right people see the right file before you are committed. For what the approval record should contain, see show me your decision, and for the whole flow, counterparty onboarding.
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