The Prevention of Money Laundering Act, 2002 (PMLA) was brought into force with effect from 1st July 2005. As per PMLA provisions every Investment Advisors shall have to adhere to client account opening procedures and maintain records of such transactions as prescribed by the PMLA and Rules notified there under. The Company under AML framework adopts a Client Due Diligence Process. Ensuring AML standard based on three categories, Client Acceptance, Client Identification and Monitoring/Reporting of Suspicious Transactions (MSTR). The suspicious transactions shall include large as well as cash transactions above a threshold limit as per applicable regulations and shall be monitored and reported
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. A satisfactory KYC procedure provides the foundation for recognizing unusual or suspicious transactions. Knowledge of the customer's normal or expected activities would enable the Company to recognize when a transaction or series of transactions are abnormal. Accounts categorized as high risk accounts shall be subject to intensified monitoring. Sufficient guidance/training shall be imparted to staff to enable them to recognize potentially suspicious transactions. The assessment of suspicious transaction shall be based on a reasonable evaluation of relevant factors, including having information on the client's business, financial history, background, behavior and threshold limits for transactions as stipulated by applicable regulations. As a part of ongoing monitoring, transactions of individuals/entities shall be screened against negative list, including those notified by regulators/statutory authorities.
The Company would endeavor to implement appropriate systems so as to-:
The Human Resource Policy of the Company shall include the due diligence procedures from an AML perspective that need to be carried out before employing any personnel including temporary or outsourced manpower. Keeping in view the new regulatory guidelines, the due diligence procedure would also include name screening of prospective employees against the list of terrorists / individuals / entities provided by regulators
The role of employees in implementing any AML framework being critical, employees would be expected to carry out the stipulated procedures efficiently. Any inefficient or suspicious behavior of employees shall be dealt with suitably. The employees shall maintain strict confidentiality in regard to KYC, MSTR and other AML procedures.
If any activity is outsourced to any agency/individual, it would be ensured that they would adhere to the guidelines outlined in this Policy.
Adequate ongoing training programmes shall be conducted for all employees on the requirements laid down in this Policy document as well as the KYC/AML procedures. Specialized training programmes shall be undertaken to address the needs of:
The AML training programmes shall address the requirements relating to the following:
He has the executive responsibility for monitoring day-to-day implementation of the AML Policy and Procedures. The functions of the PO shall include
Cash Transaction Report - On a monthly basis before 15th of the succeeding month.
Suspicious Transaction Report - within seven days from the date of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of integrally connected are of suspicious nature. Monitoring of compliance and exceptional reporting. Providing inputs to employees/managers on issues related to ML risks. Collating and maintaining the AML records. Ensuring the validity and accuracy of the data used for AML analysis. Responsibility of escalating of unusual behavior and suspicious activity/transactions, to Designated Director.
The Company shall maintain appropriate documentation on their customer relationships and transactions to enable reconstruction of any transaction.
The records shall be maintained for a period of five years from the date of cessation of the transaction. Records shall be maintained in a manner, which facilitates its easy retrieval as and when required.
The scope of internal audit of the Company shall include testing of compliance with the AML Policy and KYC/AML procedures. The checklist of items reviewed, including a summary of deficiencies and actions taken must be documented and submitted to the PO.
The Company shall monitor all Large Transactions and Cash Transactions beyond the threshold limits as defined by the regulatory authorities.
The Company shall educate the customers on the objectives of KYC/AML related programmers by way of preparation of specific literature/pamphlets, hosting relevant KYC/AML information on the website of the Company etc.