A related party is any person or entity that has control, ownership, or a significant influence over a customer or entity involved in a transaction. Caruso uses this definition to help determine who must complete Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
To learn how to create or manage related parties in Caruso, see our step-by-step guide: Create and Manage Related Parties.
Who Qualifies as a Related Party?
A person is considered a related party if they:
Have effective control of an entity, or of the person on whose behalf a transaction is being conducted; or
Own more than 25% of the entity or customer involved in the transaction.
If you are investing in your own name as an individual, you are typically the related party. For companies, trusts, or partnerships, there may be several related parties.
Example: Complex Company Structure
Consider a company with the following setup:
Two shareholders each own more than 25% of the available shares
One shareholder is a trust with a corporate trustee
The other shareholder is an individual who is also a director
The company also has an independent director
In this scenario, all individuals highlighted in green are considered related parties of the company and each would be required to complete AML/KYC verification.
How Related Parties Work in Caruso
Caruso supports many-to-many relationships between related parties and investing entities. This means:
A single related party can be linked to multiple investing entities
Each investing entity can have multiple related parties
When adding a related party, you can search for an existing record or create a new one
Each relationship between a related party and an investing entity can have its own notes and settings, including marking a relationship as exempt from KYC
This approach reduces duplication and makes it easier to manage complex ownership structures where the same individual or entity has relationships with multiple investments.
Where KYC Data Sits
Identity verification and KYC details are held on the related party record, not on the account. An account is a person-level record used to manage relationship history with the fund and to control Investor Portal access. This separation means a person’s verification is captured once and reused across all of their relationships.
Note: If your data was migrated from the previous model, any account that held KYC information has been recreated as an individual related party, retaining all details and verification history. These appear in an investing entity’s related party tree with the relationship type Migrated account, and are linked back to the originating account. You will see this link in the header of both the account and the related party record.
Related Party Types
Caruso supports two types of related parties:
Individual: A natural person such as a director, shareholder, trustee, or beneficial owner
Entity: An organisation such as a company, trust, or partnership that forms part of an ownership structure
Entity related parties can have their own related parties, allowing you to build out complex ownership structures.
Verifying Related Parties
Individual related parties may be required to complete identity verification (KYC). Caruso makes this quick and simple:
Verification is completed online and usually takes less than two minutes
Related parties receive an email or text message with a secure link to start their verification
Once verified, their details are automatically updated on their related party record
Verification status applies across all investing entities the related party is linked to
Linking Related Parties and Accounts
Individual related parties can be linked to account records in Caruso. This is useful when the same person exists as both an account (for Investor Portal access and communications) and a related party (for compliance purposes).
When linked, you can easily navigate between the account and related party records using the link shown in the header of each.
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If you have any questions or need help at any stage, please contact our Caruso Support team either by email or live chat.