Anti Money Laundering Policy & Procedures
Money Laundering (ML) is the processing of criminal proceeds in order to disguise their illegal origin.
The Company is fully committed to comply with all applicable laws designed to combat money laundering and any activity, which facilitates the funding of terrorist or criminal activities.
We would adopt a risk-based approach in implementing its AML framework. The AML standards would be primarily based on two pillars, namely, KYC and Monitoring/Reporting of Suspicious Transactions (MSTR). The suspicious transactions shall be monitored and reported.
Know Your Customer (KYC)
The Company is aware that availability of sufficient customer information underpins all other AML procedures and should be seen as a critical element in the effective management of ML risks.
The KYC procedures would be based on the following principles:
- The Company shall ensure that there is in place a process of customer identification and verification depending on the nature/status of the customer.
- Appropriate customer identification and verification procedures shall be conducted at different stages i.e. while establishing a relationship, carrying out a financial transaction or when the Broker has doubt about the authenticity/veracity or the adequacy of the previously obtained customer identification data.
- The Company shall ensure that a business relationship is commenced only after establishing and verifying the identity of the customer and understanding the nature of the business the customer expects to conduct.
Monitoring/Reporting of Suspicious Transactions (MSTR)
Ongoing monitoring of accounts is an essential element of an effective AML framework. A Suspicious Transaction is one that is inconsistent with a customer’s known, legitimate activities or with the normal business for that type of account. Knowledge of the customer’s normal or expected activities would enable us to recognize when a transaction or series of transactions are abnormal.
The Company would endeavor to:
- Monitor transactions in order to identify unusual behavior
- Upon such identification, to conduct enhanced due diligence
The Company shall maintain appropriate documentation on their client relationships and transactions to enable reconstruction of any transaction.
The records shall be maintained as per applicable regulations. Further, in case of the any litigation, investigations by enforcement authorities, the records should be maintained until the case decides.
Customer Acceptance Policy
Due Diligence for Account Opening:
- The Company shall not accept account-opening forms in anonymous or fictitious/benami name(s). Adequate due diligence is a fundamental requirement for establishing the identity of the customer. Identity generally means a set of attributes which together uniquely identify a natural person or legal entity. In order to avoid fictitious and fraudulent applications of the customers, and to achieve a reasonable degree of satisfaction as to the identity of the customer, we shall conduct appropriate basic due diligence. The nature and extent of basic due diligence measures to be conducted by the Broker at the time of establishment of account opening/relationship, would be dependent upon the risk category of the customers and involve the collection and recording of information by using reliable independent documents, data or any other information. This may include identification and verification of the applicant and wherever relevant, ascertaining of occupational details, legal status, ownership and control structure and any additional information in line with the assessment of the ML risks posed by the applicant
- Appropriate Enhanced Due Diligence measures shall be adopted for customers, with a high-risk profile, especially those for whom the sources of funds are not clear, and customers who are Politically Exposed Persons (PEPs) and their family members/close relatives. Politically Exposed Persons are individuals who are or have been entrusted with prominent public functions in a local or foreign government, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc.
- The Company shall ensure that the identity of the customer does not match with any person with known criminal background or with banned entities such as individual terrorists or terrorist organizations, enforcement authorities etc.
Risk Profiling of customer:
- The Company has adopted a risk-based approach in implementing its AML framework as spelt out in this document. This approach includes assessment of various risks associated with different types of customer.
- The Company shall not register any high risk client without obtaining adequate proof of the ultimate beneficiary behind the account. These clients shall be allowed only delivery transactions after receipt of adequate VAR margins. No other transactions shall be allowed to these clients.
- The Company shall obtain satisfactory evidence of the identity of the customer depending upon the perceived risks at the time of commencement of relationship/accepting account opening form. Such evidences shall be substantiated by reliable independent documents, data or information or other means like physical verification etc. In order to avoid customer inconvenience, under special circumstances, the Broker may rely on certain data/information available with itself and/or with external reliable sources for the purpose of establishing the identity of the customer.
Identification of Suspicious transactions and reporting thereof:
The Company shall monitor the clients’ activities with regards to its exposure and turnover and other dealings in Securities.
In case there is an incident of abnormality the Principal Officer of the Company shall enquire into the matter and conclude upon whether there is adequate reason for arisal of suspicion behind such abnormality.
In case the activity is identified to be of a suspicious nature the Principal Officer shall promptly report the same to the Financial Intelligence Unit as per the relevant formats prescribed from time to time.