KYC rules, short for "Know Your Customer" rules, refer to the regulatory and legal requirements that financial institutions and certain other businesses must follow to verify the identity of their clients. These rules aim to prevent money laundering, terrorist financing, fraud, and other illicit activities by ensuring that organizations understand who their customers are, their financial dealings, and the potential risks of illegal intentions. KYC procedures typically involve collecting and verifying information such as identification documents, addresses, and financial backgrounds.