Policy on Prevention of Money Laundering Act, 2002
The Securities and Exchange of India, under its Prevention of Money Laundering Act, 2002 has laid down the requirement to maintain a record of all transactions, the nature and value of which has been prescribed in the rules under Prevention of Money Laundering Act, 2002 (PMLA). With respect to the said requirement, the company has laid down the under mentioned policies and procedures:
 
1. No transactions which are cash in nature shall be executed either on behalf of the client or on behalf of the company. The company should make the reporting of the following transaction
  • All cash transactions of the value of more than Rs. 10 lacs or its equivalent in foreign currency.

  • All series of cash transactions integra lly connected to each other which have been valued below Rs. 10 lakhs or its equivalent in foreign currency where such series of transaction take place within one calendar month.

  • All suspicious transactions whether or not made in cash and including, inter – alia, credits or debits into from any non monetary account such as d-mat account, security account maintained by the registered intermediary.
 
2. The identity of the client opening the account with the company shall be identified and verified. Apart from the legal identity of the client the beneficial identity should also be ascertained. A beneficial owner may be termed as a person holding the influential right or a person exercising ultimate effective control over a legal person or arrangement. The identification of the legal and the beneficial owner should be done through independent and reliable sources. The KYC norms with respect to the clients have to be strictly followed. The name, address and the other details which has have been provided by the clients are true and correct.
 
3. The above said due diligence and the scrutiny of the client has to made on regular basis. It shall not be a one time exercise. The member should be aware of any changes in the management, ownership and control over the legal person. The details provided by the client with respect to the KYC should be updated on regular basis.
 
4. On the basis of the above, the risk exposure of the clients to be determined. The Clients should be allowed to trade keeping in view the financial capacity of the client. Any suspicious transactions / money inflow should be scrutinized. The risk exposure of the client should be reviewed and updated either on annual basis or at a pre-determined interval based on the updated financial review.
 
5. Apart from the financial details of the clients the social worthiness of the client to be verified. To Ensure that the Identity of the client does no match any person having known criminal background / banned / under criminal or civil proceeding by any enforcement agency worldwide
 
6. The company shall be extra-precaution in case of “clients of special category” as prescribed in para 5.4 of the Guidelines for Anti-Money Laundering Measures.
 
7. In case of any suspicion, the transaction should be scrutinized right from its route level. The origin of the funds, the destination of the funds, the identity of the person making the transactions and other relevant aspects
 
8. Further, reporting to mode in case of
  • Clients whose identity verification seems difficult

  • Clients whose sources of fund are not clear

  • Substantial increase in the business without reasonable cause

  • Unusually large cash deposits

  • Clients transferring huge amount from overseas locations with instruction for payment in cash

  • Transfer of Investment Proceed to unrelated third party
 
9. All the points referred above shall be applicable in case of inflow / outflow and other transactions with respect to the dematerialized securities.

In respect of all the matters discussed above, the company has appointed its principal officer for tracking the above in risk management segment and demate segment. Internal hierarchy for the implementation of above mentioned polices have been determined. Apart from this, the company has appointed external agency for verification of KYC procedure and documents for identification of client’s declaration.