Compliance Fundamentals
What Is the Four-Eyes Principle
in Regulated Workflows?
The four-eyes principle is a control that requires two people to approve an action before it takes effect: one person prepares it, and a second, independent person reviews it. The Four Eyes client compliance lifecycle platform acts as your digital second set of eyes, checking every regulated workflow action and surfacing exceptions with full rationale, while an independent human reviewer makes the final decision. This model secures vital wealth management regulated processes including account onboarding, KYC modifications, trade supervision & surveillance and product risk determinations.
The Four-Eyes Principle, Explained
Also Called the Four-Eyes Control,
Check or Approval
Two people, one decision
One person prepares the action and a second person approves it. Nothing takes effect on one person’s say-so.
An independent reviewer
The reviewer can’t be the person who prepared the item, so mistakes and conflicts get a fresh set of eyes.
Evidence on the record
Who prepared it, who approved it, when, and what changed are recorded, so the review can be shown to an examiner.
Applied where risk is highest
Firms decide which actions need a second review, such as new accounts, material KYC changes or product approvals.
The Principle in Practice
How Four Eyes Financial
Applies the Four-Eyes Principle
Pre-fills digital forms with client information and validates every field before the application is submitted.
A supervisor reviews the application in an approval queue before the account opens.
Captures the KYC update in one step and routes material changes for approval.
A reviewer approves material changes before they take effect.
Tracks every product, risk rating and document change, and flags stale ratings and expiring documents.
A second reviewer approves each change before advisors see it.
Turns surveillance alerts, account exceptions and advisor requests into cases with routing and deadlines.
A secondary approval is required before the case closes.
AI drafts summaries, explanations and extractions within named, governed workflows.
A human approves every AI output before it is used, and the decision is logged.
Regulatory Expectations
Why Regulators Expect
a Second Review
Regulator expectation
How the four-eyes principle supports it
A compliance system that provides reasonable assurance of compliance, under NI 31-103 s. 11.1, applied by CIRO dealers (Canada)
Independent review of account openings, KYC changes and product decisions shows the system works, with evidence of who checked what
A supervisory system with documented review, under FINRA Rule 3110 (US broker-dealers)
Supervisor approval is recorded with names and timestamps, so reviews of accounts and activity can be evidenced
Written compliance policies and procedures, under SEC Rule 206(4)-7 (US RIAs)
A second approval on key actions turns written procedures into a control that runs on every item
Frequently Asked Questions
Four-Eyes Principle FAQs
What is the four-eyes principle?
The four-eyes principle is a control that requires two people to approve an action before it takes effect: one prepares it and a second, independent person reviews it. It reduces errors, fraud and conflicts of interest, and it gives firms evidence that decisions were checked.
Is the four-eyes principle the same as maker-checker?
Yes. Maker-checker is the banking term for the same idea: a maker prepares a transaction or change and a checker approves it. The four-eyes principle, four-eyes control, four-eyes check and dual control all describe a second, independent review.
Is the four-eyes principle a regulatory requirement?
Most securities rules don’t use the term, but they expect supervision and review that a second approval delivers. In Canada, NI 31-103 requires a compliance system that provides reasonable assurance of compliance. In the US, FINRA Rule 3110 requires a supervisory system and SEC Rule 206(4)-7 requires written compliance policies for RIAs.
What are examples of four-eyes controls in wealth management?
Common examples are supervisor approval of new accounts, review of material KYC changes, second-reviewer approval of products added to the shelf, secondary approval before closing a surveillance case, and human approval of AI-generated content.
How does software enforce the four-eyes principle?
Compliance software routes each item to a second reviewer, holds it until it is approved, and records who prepared it, who approved it and when. That turns a written procedure into a control that runs on every item and leaves an audit trail.
Four Eyes Financial
See the Four-Eyes Principle in Action
Book a demo to see second-reviewer approvals across onboarding, KYC, product shelf, cases and AI, with every decision on the record.