Proof of Sources of Funds or PoSoF is one or several documents providing information on the origin of funds that are being used in a particular transaction.
Any submitted PoSoF documents have to cover all withdrawals, previous as well as the most recent ones, and deposits made via the funding method in question.
Naturally, these measures are a part of an AML policy necessary for every type of business involving money transactions. Compliance with the anti-money laundering regulations prevents frauds from inflicting reputational damage on the company and eliminates the risk of substantial fines that come along with the accusation.
In particular, SoF has to be verified when an individual’s financial capabilities are in question.
It is a common case for mortgage inquiries when a note from the bank helps landlords to understand whether the potential tenant can afford the mortgage. Banks are certainly more inclined to issue a positive statement if the individual can provide a PoSoF, while those with insufficient funding will likely be rejected.
Complete tax returns and audited financial statements.
Official documents proving the ownership of the company, company registration documents, stock records, promotional materials, website addresses, any records proving the sale of business, valuation of business.
Proof of investment/securities accounts in the span of the last three years, bank statements and stock certificates.
Individual’s CV, records of education, contracts, licences and reference letters proving employment.
Documents on property mortgage, real estate purchase/sale, valuation of owned real estate, lease documents on property producing lease income.
Documentation on divorce, inheritance, lawsuits and gifts.
All of the mentioned documents have to be explaining the source of funds in details and from different angles. For example, if the funds come from a gift, a simple note from a donator will not be enough. The individual will have to submit:
Finally, proof of source of funds verification is an extremely valuable part of client onboarding and it is in your power to make it quick and effortless for the users.