Anti Money Laundering

RISK	PARTICULARS
Low Risk ( Level I) ):	• Customers who pose low or nil risk to P.SURYAKANT may be categorized as Low risk. • Individuals (other than High Net Worth) and entities whose identities and sources of wealth can be easily identified and transactions in whose accounts by and large conform to the known profile may be categorized as low risk. • The illustrative examples of low risk customers could be salaried employees whose salary structures are well defined, people belonging to lower economic strata of the society whose accounts show small balances and low turnover, Government Departments and Government owned companies, regulators and statutory bodies etc. In such cases, only the basic requirements of verifying the identity and location of the customer shall be met.
Medium Risk ( Level II) ):	• Customers which are likely to pose a pose a higher than average risk ie medium risk to P.SURYAKANT may be categorized as medium risk.   They can be the following:   a) Persons in business/industry or trading activity where the area of his residence or place of business has a scope or history of unlawful trading/business activity.   b) Where the client profile of the person/s opening the account, according to the perception of the Member is uncertain and/or doubtful/dubious.
High Risk (Level Ill):	• Customers which are likely to pose high risk to P.SURYAKANT may be categorized as High risk • Enhanced due diligence measures based on the risk assessment thereby requiring intensive ‘due diligence’ for higher risk customers, especially those for whom the sources of funds are not clear.
Very High Risk ( Level IV)	The persons requiring very high level of monitoring by P.SURYAKANT are categorized as Level IV. • They can be the following (a) Clients who have defaulted in the past (b)Clients who have a suspicious background (c) HNIs whose identity and source of wealth are difficult to identify (d) Politically exposed persons (e) Clients of Special Category (f) Dormant Account

 

CLIENTS	PARTICULARS
Active Clients	In case of change in details only ,Documents are updated on annual basis other wise oral confirmation from client regarding no change are obtained.
Inactive Clients	For Inactive Clients Documents are updated at the time of reactivation

 

“Inactive client means client having no transaction since last 2 years”
Reliance on third party for carrying out Client Due Diligence (CDD)
Pursuant to Rule 9 (2) of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 Rules and in accordance with the regulations and circulars/ guidelines issued by SEBI from time to time and Provided that third party shall be regulated, supervised or monitored for, and have measures in place for compliance with CDD and record-keeping requirements in line with the obligations under the PML Act.
P.SURYAKANT may rely on a third party for the purpose of:
(a) Identification and verification of the identity of a client.
&
(b) Determination of whether the client is acting on behalf of a beneficial owner, identification of the beneficial owner and verification of the identity of the beneficial owner.

II. Customer Identification Procedure (CIP)
“Customer identification means identifying the person and verifying his/her identity by using reliable, independent source documents, data or information”

a) P.SURYAKANT needs to obtain sufficient information necessary to establish, to its satisfaction, the identity of each new customer, whether regular or occasional, and the purpose of the intended nature of relationship. P.SURYAKANT must also be able to satisfy the regulators that due diligence was observed based on the risk profile of the customer in compliance with the extant guidelines in place.
b) P.SURYAKANT have in place a comprehensive Customer Identification Procedure which details the various documents that P.SURYAKANT can take as Identity, Address proof for various types of customers (refer Annexure 2) This Customer Identification Procedure document are updated with approvals from Compliance, and Business groups, with subsequent ratification by the Board of Directors. KYC/AML Policy However, merely obtaining identification documents for identity, address and signature proof from the customer does not mean that the KYC is complete. KYC means actually knowing the customer, nature of his business and the purposes for which P.SURYAKANT account will be used.
c) P.SURYAKANT may ask for periodical updation of customer identification and other data after the account is opened SEBI Vide its circular no. CIR/MIRSD/2/2013 dated January 24, 2013 has provided guidelines for identification of Beneficial Ownership

A ) FOR CLIENTS OTHER THAN INDIVIDUALS OR TRUSTS:
I.e. Company, partnership or unincorporated association/body of individuals
In this type of category, Member should identify beneficial ownership and verify the identity of such person through following information.

1. Identification of Natural persons who has a controlling ownership interest.
a. In Case of Company -a Ownership/Entitlement of more than 25% of Shares or Capital or Profits b. In case of Partnership a Ownership/Entitlement of more than 15% of Capital or Profits c. In case of Unincorporated association or body of individual – Ownership/Entitlement of more than 15% of property or Capital or Profits.
2. In case where there exist doubt under above identification point 1,regarding controlling ownership, member shall identify control through means viz.
a) Voting Rights
b) Agreements
c) Arrangements or any other manner.
3. If, No person is identified under above identification Point 1 & 2, the identity of the relevant natural person who holds the position of senior managing official.

B. FOR CLIENT WHICH IS A TRUST:
In case of Trust, Member shall identify beneficial ownership through The identity of settler of Trust The Trustee The Protector The Beneficiaries with 15% or more interest in trust Any other person having ultimate control over trust through chain of control or ownership.

C. EXEMPTION IN CASE OF LISTED COMPANIES:
Where the client or the owner of the controlling interest is a company listed on a stock exchange, or is a majority-owned subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies.

D. APPLICABILITY FOR FOREIGN INVESTORS:
n case of foreign investors’ viz., Foreign Institutional Investors, Sub Accounts and Qualified Foreign Investors, may be guided by the clarifications issued vide SEBI circular CIR/MIRSD/11/2012 dated September 5, 2012, for the purpose of identification of beneficial ownership of the client which clarifies that;

A) Though it is not mandatory, the intermediaries shall carry out due diligence as per the PMLA and SEBI Master Circular on AML about the financial position of the Foreign Investors.

B) List of beneficial owners with shareholding or beneficial interest in the client equal to or above 25% to be obtained. If Global Custodian /Local Custodian provide an undertaking to submit these details, then intermediary may take such undertaking only. Any change in the list to be obtained based on risk profile of the client.

III Monitoring of Transactions
(A) Extent of monitoring is in accordance to the risk sensitivity of the account. P.SURYAKANT pays special attention to all complex, unusually large transactions and all unusual patterns which have no apparent economic or visible lawful purpose. Transactions that involve large amount of trading activity inconsistent with the size of the balance maintained may indicate that the funds are being ‘washed’ through the account. High risk accounts are subjected to intensive monitoring.

(B)No Cash Transaction are allowed. Demand Draft shall be accepted only in exceptional cases and a declaration regarding legitimate income source shall be taken from the client giving payment through Demand Draft. A register detailing date of DD, Client Code, Name, PAN, DD amount and reason for giving DD shall be maintained and reviewed to prevent frequent DD transaction from the particular client.
Further, If prefunded instruments amount is more than or equal to 50,000 per day per client, proofs as required by SEBI are to be taken on record before acceptance of instrument. P.SURYAKANT continue’s to follow strictly the instructions regarding suspicious transactions issued threshold limit of Rs.10 lakh and required to maintain proper record of the same.

(C) The KYC Department shall ensure adherence to the KYC policies and procedures. All staff members shall be provided training on Anti Money Laundering. The focus of training are different for front office staff, back office staff, compliance staff, senior level staff and staff dealing with new customers.

IV. Risk Management
(A) The overall responsibility/implementation and adherence of this KYC/AML policy lies with the Compliance & Surveillance Unit of P.SURYAKANT.

(B) A threshold limits for particular group of accounts prescribed and staff pays particular attention to the transactions which exceed these limits. The threshold limits shall be reviewed annually and changes, if any, conveyed to Staff for monitoring.

(C) The Concurrent / Internal Auditors specifically checks and verifies the application of KYC/AML procedures and comment on the lapses observed in this regard. The reports and compliance in this regard shall also put up before the Audit & Compliance Committee of the Board atleast at quarterly intervals.

Internet Trading Facility :
• After proper customer acceptance & identification procedures for opening of trading account, if client requires IBT/Wireless facility, a written request is taken if he has not opted for said facility through KYC.

• We make sure that such clients are literate and have understood the rights and obligation with regard to Internet/wireless Trading.

Employee Hiring & Training
• All the proposed application for employment are taken only from the person who have valid reference of our existing staff and /or have relations with the present staff and directors.
• It is prudent to also verify education and employment information which uniquely qualifies candidates for the position.
• In addition, it as a strong recommenation that reference checks be completed prior to making the hiring decision. • Further, if the employee is for the post of dealer, NCFM/BCSM certification are also be verified as a condition of employment.
• Employment verification is been completed within one week of making an offer of employment to any individual.
• Educational and NCFM/BCSM verificationsis been also completed within one week of making an offer of employment to any individual.
• KYC norms / AML standards / CFT measures have been prescribed to ensure that criminals are not allowed to misuse P.SURYAKANT infrastructure. It should therefore, be necessary that adequate screening mechanism is put in place by P.SURYAKANT as an integral part of their recruitment / hiring process of personnel.

After completing all the above procedures and formalities of employee screening, the company appoints the employee with the negotiated terms and I conditions.
Further, Employees are trained with regard to compliance & Operational requirement of broking & DP entities. Also regulatory knowledge w.r.t Depository, Stock Exchange , Money Laundering, etc are also imparted so that compliance & Business risk of Broker & DP are minimized.

Customer Education
• Implementation of KYC procedures requires P.SURYAKANT to demand certain information from the customers that may be of personal in nature or which have hitherto never been called for.
• The front desk staff handles such situations tactfully while dealing with customers and educate the customer of the objectives of the KYC programme as sometimes it leads to a lot of questioning by the customer as to the motive and purpose of collecting such information.
• P.SURYAKANT have a heightened awareness in the system to check for Combating Financing of Terrorism transactions which give rise to a reasonable ground of suspicion that these may involve financing of the activities relating to terrorism.
• As an Educative measure P.SURYAKANT provideds specific literature/pamphlets to educate customers in this regard.

Record Keeping
As per Rule 3 of the Rules notified by Notification No. 9/2005 , Intermediary shall maintain a record of, –

A. all cash transactions of the value of more than rupees ten lakhs or its equivalent in foreign currency;
B. all series of cash transactions integrally connected to each other which have been valued below rupees ten lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month;
C. all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions;
D. all suspicious transactions whether or not made in cash.

• Records evidencing the identity of its clients and beneficial owners as well as account files and business correspondence shall be maintained and preserved for a period of five years after the business relationship between a client and intermediary has ended or the account has been closed, whichever is later.’
• P.SURYAKANT maintain’s and preserve’s the record of documents evidencing the identity of its clients and beneficial owners (e.g., copies or records of official identification documents like passports, identity cards, driving licenses or similar documents) as well as account files and business correspondence for a period of five years after the business relationship between a client and intermechary has ended or the account has been closed, whichever is later.”

REVIEW OF POLICY
The aforesaid AML policy is reviewed periodically with regard to testing its adequacy to meet the compliance requirements of PMLA 2002. The Principal Officer is the authority to give directions to undertake additions, changes, modifications etc. as directed by SEBI/ FIU-IND. P.SURYAKANT timely review the policy and the existing policy, is last reviewed on 31 Mar 2016.

======================================================Annexures======================================================

Annexure 1
AN INDICATIVE LIST OF SUSPICIOUS ACTIVITIES

• Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime. • Appears to be made in circumstances of unusual or unjustified complexity.
• Appears to have no economic rationale or bonafide purpose.
• Gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism.
• Identity verification or address details seems difficult or found to be forged / false.
• Asset management services where the source of the funds is not clear or not in keeping with apparent standing /business activity.
• Substantial increases in business without apparent cause.
• Unusual & Unexplained large value of transaction.
• Transfer of large sums of money to or from overseas locations.
• Unusual & Unexplained activity in dormant accounts.

Annexure 2
CUSTOMER IDENTIFICATION PROCEDURE FOR ACCOUNT OPENING

Based on risk perception, type / entity of customer, segment of customer following features shall be verified with supporting documents obtained from the customers –
INSTRUCTIONS/CHECK LIST FOR FILLING KYC FORM A. IMPORTANT POINTS:
1. Self attested copy of PAN card is mandatory for all clients, including Promoters/Partners/Karta/Trustees and whole time directors and persons authorized to deal in securities on behalf of company/firm/others.
2. Copies of all the documents submitted by the applicant should be self-attested and accompanied by originals for verification. In case the original of any document is not produced for verification, then the copies should be properly attested by entities authorized for attesting the documents, as per the below mentioned list.
3. If any proof of identity or address is in a foreign language, then translation into English is required.
4. Name & address of the applicant mentioned on the KYC form, should match with the documentary proof submitted.
5. If correspondence & permanent address are different, then proofs for both have to be submitted.
6. Sole proprietor must make the application in his individual name & capacity.
7. For non-residents and foreign nationals, (allowed to trade subject to RBI and FEMA guidelines), copy of passport/PIO Card/OCI Card and overseas address proof is mandatory.
8. For foreign entities, CIN is optional; and in the absence of DIN no. for the directors, their passport copy should be given.
9. In case of Merchant Navy NRI’s, Mariner’s declaration or certified copy of CDC (Continuous Discharge Certificate) is to be submitted.
10. For opening an account with Depository participant or Mutual Fund, for a minor, photocopy of the School Leaving Certificate/Mark sheet issued by Higher Secondary Board/Passport of Minor/Birth Certificate must be provided.
11. Politically Exposed Persons (PEP) are defined as individuals who are or have been entrusted with prominent public functions in a foreign country, 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.

B. Proof of Identity (POI): –
List of documents admissible as Proof of Identity:
1. Unique Identification Number (UID) (Aadhaar)/ Passport/ Voter ID card/ Driving license.
2. PAN card with photograph.
3. Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

C. Proof of Address (POA): –
List of documents admissible as Proof of Address: (*Documents having an expiry date should be valid on the date of submission.)
1. Passport/ Voters Identity Card/ Ration Card/ Registered Lease or Sale Agreement of Residence/ Driving License/ Flat Maintenance bill/ Insurance Copy.
2. Utility bills like Telephone Bill (only land line), Electricity bill or Gas bill – Not more than 3 months old.
3. Bank Account Statement/Passbook — Not more than 3 months old.
4. Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts.
5. Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Officer/Notary public/Elected representatives to the Legislative Assembly/Parliament/Documents issued by any Govt. or Statutory Authority.
6. Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.
7. For FII/sub account, Power of Attorney given by FII/sub-account to the Custodians (which are duly notarized and/or apostiled or consularised) that gives the registered address should be taken. 8. The proof of address in the name of the spouse may be accepted.

D. In case of Non-Individuals, additional documents to be obtained from non-individuals, over & above the POI & POA, as mentioned below:


E. Additional documents to be taken in case clients want to open accounts in F&O / Currency segments.
Obtaining financial information from client trading in derivatives segment:

1) P.SURYAKANT shall review and update periodically client information in the Client Registration Form and are also advised to ensure that client registration details including financial details of the clients are obtained and updated at regular intervals.
2) The member shall collect documentary evidence of financial details provided by the clients who opt to deal in the derivative segment at the time of registration and at the time of annual updation. An illustrative list of documents which the members may collect from its clients (towards documentary evidence of financial details) is as below:
a. Copy of ITR Acknowledgement.
b. Copy of Annual Accounts.
c. Copy of Form 16 in case of salary income.
d. Net worth certificate.
e. Salary Slip.
f. Bank account statement for last 6 months.
g. Copy of demat account Holding statement.
h. Any other relevant documents substantiating ownership of assets.
i. Self declaration along with relevant supporting.


AUDIT/TESTING OF ANTI MONEY LAUNDERING PROGRAM :
The Anti Money Laundering (AML) program is subject to periodic audit specifically with regard to testing its adequacy to meet the compliance requirements. The audit/testing be conducted by company’s personnel not involved in framing or implementing the AML program or it may be done by a qualified third party. The report of such an audit/testing would be placed before the senior management for making suitable modifications/improvements in the AML program. The above policy was reviewed by Shraddha Parikh-Principal Officer and placed before board of meeting on 18th May,2018.


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