pmla policies

KALPATARU MULTIPLIERS LTD., BHOPAL. POLICIES AND PROCEDURE FOR PREVENTION OF MONEY LAUNDERING (Issued as per the requirements of the PMLA Act 2002)

Company Policy

It is the policy of the Company to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have derived from legitimate origins or constitute legitimate assets.

Officer Designation and Duties

Policy

The Principal Officer will also ensure that proper AML records are kept. When warranted, the Principal Officer will ensure filing of necessary reports with the Financial Intelligence Unit (FIU – IND). The duties of the Principal Officer will include monitoring the Company’s compliance with AML obligations and overseeing communication and training for employees.

Procedure

The Company has designated Shri Amitabh Manya Jain, Managing Director as the Principal Officer and Designated Director for its Anti-Money Laundering Program, with full responsibility for the Company’s AML program. Shri Amitabh Manya Jain is DCE from the SATI Vidisha (MP), and is qualified by more than 23 Years experience, knowledge and training. The Company has provided the FIU with contact information for the Principal Officer and Designated Director, including name, title, mailing address, e-mail address, telephone number and facsimile number. The Company will promptly notify FIU of any change to this information.

Customer Identification and Acceptance

Policy

At the time of opening an account of the constituent or executing any transaction with it, the Company will verify and maintain the record of identity and current address or addresses including permanent address or addresses of the client, the nature of business of the client and his financial details.

Procedure

The copy of following documents will be taken as proof of identity and current address or addresses including permanent address or addresses of the client, the nature of business of the client and his financial detail:

Constitution of Client Proof of Identity Proof of Address Others
Individual PAN Card Copy of Bank Statement, etc Income tax return, Salary certificate, Annual Accounts etc.
Company PAN Card
Certificate of incorporation
Memorandum and Articles of Association
Resolution of Board of Directors
As above Proof of Identity of the Directors/Others authorized to trade on behalf of the Company Income tax return, Annual Accounts Net Worth Certificate etc.
Partnership Firm PAN Card
Registration certificate
Partnership deed
As above Proof of Identity of the Partners/Others authorized to trade on behalf of the Firm Income tax return, Annual Accounts Net Worth Certificate etc.
Trust PAN Card
Registration certificate
Trust deed
As above Proof of Identity of the Trustees/ others authorized to trade on behalf of the trust Income tax return, Annual Accounts Net Worth Certificate etc.
AOP/ BOI PAN Card
Resolution of the managing body
Documents to collectively establish the legal existence of such an AOP/ BOI
As above Proof of Identity of the Persons authorized to trade on behalf of the AOP/ BOI Income tax return, Annual Accounts Net Worth Certificate etc.

All PAN Cards received will be verified from the Income Tax / UTITSL / NSDL website before the account is opened. The Company will maintain records of all identification information for five years after the account has been closed.

If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our Company will not open the new account.

Customer due diligence process (CDD)

The main aspect of this policy is the customer due diligence process which means

Obtaining sufficient information about to the client in order to identify who is the actual beneficial owner of the securities or on whose behalf transactionsis conducted.

Verify the customer’s identity using reliable, independent source document,data or information.

We may rely on a third party for the purpose of (a) identification and verification of the identity of a client and (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 . such third party shall be regulted,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 such reliance shall be subject to the PML rules and shall be in accordance with the regulations an circulars/ guidelines issued by SEBI from time to time.

We will periodically update atleast once in a year all documents, data or information of all clients and beneficial owners collected under the CDD process.

Conduct on going due diligence and scrutiny of the account/ client to ensure that the transactions conducted are consistent with the client ,s background / financial status , its activities and risk profile.

The customer due diligence process include three specific parameters
  • Policy for acceptaince of client’s
  • Client identification procedure
  • Suspicious transaction identification & reporting

The information provided by the client should be checked though independent source circulated by the government of India and SEBI from time like various united nation security council resolutions these can be accessed at http://www.un.org/sc/committes/1267/aq_sanctions_list.shtml and http://www.un.org/sc/committes/1988/list.shtml)

We must exercise additional due diligence in case of the client of special category which include but not limited to
  • Non resident client
  • High networth client ( i.e the client having Networth exceeding 100 Lakhs and doing the intra day trading volume of more than 5 crore and daily delivery volume more than Rs. 25 lakhs)
  • Trust charities , NGOs and organization receiving donations
  • Companies having close family shareholdings or beneficial ownership
  • Politically exposed persons (PEP) of foreign origin
  • Current / former head of state , current or former senior high profile politicians and connected person ( immediate family, close advisors and companies in which such individuals having interest or significant influence )
  • Companies offering foreign exchange offering
  • Client in high risk countries ( where existence / effectiveness of money laundering controls is suspect, where there is unusual banking secrecy countries active in narcotics production countries where corruption ( as per transparency international corruption perception index ) is highly prevalent countries against which government sanctions applied , countries reputed to be any of the following – havens/ sponsor of international terrorism , offshore financial.centers tax havens, countries where fraud is highly prevalent .
  • Non face to face clients
  • Client with dubious reputation as per public information available etc.
  • Such other person who as per our independent judgment may be classified as CSC.

Policy for acceptance of client

The following safeguards are to be followed while accepting client
  • No. account is opened in a fictitious / be name or an anonymous basis
  • 2- to ensure that we must insist the client to fill up the necessary details in the KYC form in our presence and obtained all the necessary documentary evidence in support of the information filled in KYC .
  • 3- we must verify all the documents submitted in support of information filled in kyc form with the original and in- person verification should be done by own staff.
  • Moreover new client should either be introduced by an existing customer or by the senior official of company in case we have any doubt that in- complete / fictitious / information is submitted by the client we must ask for such additional information so as to satisfy ourselves about the genuineness of the client and the information of the client befor accepting his registration.

Maintenance of records

Policy

The Company will maintain records of cash and suspicious transactions as prescribed by the PMLA and Rules notified there under.

Suspicious transaction means a transaction whether or not made in cash which, to a person acting in good faith
  • gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or
  • appears to be made in circumstances of unusual or unjustified complexity; or
  • appears to have no economic rationale or bonafide purpose; or
  • gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism
Procedure
The Principal Officer will be responsible for the maintenance of following records
  • all cash transactions of the value of more than rupees ten lakhs or its equivalent in foreign currency;
  • 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;
  • all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place;
  • all suspicious transactions whether or not made in cash and including, inter-alia, credits or debits into from any non monetary account such as demat account, security account maintained by the registered intermediary.
The records shall contain the following information
  • the nature of the transactions;
  • the amount of the transaction and the currency in which it was denominated;
  • the date on which the transaction was conducted; and
  • the parties to the transaction.

The records will be updated on daily basis, and in any case not later than 5 working days

Monitoring Accounts For Suspicious Activity

Policy

The Company will monitor through the automated means of Back Office Software for unusual size, volume, pattern or type of transactions. For non automated monitoring the Company will have a set of parameters based on which the activities are to be marked as Red Flags and reported to the Principal Officer.

Procedure
The Company based on the following principles will mark the transactions as Red Flag
  • The customer exhibits unusual concern about the Company's compliance with government reporting requirements and the Company's AML policies (particularly concerning his or her identity, type of business and assets), or is reluctant or refuses to reveal any information concerning business activities, or furnishes unusual or suspicious identification or business documents.
  • The customer wishes to engage in transactions that lack business sense or apparent investment strategy, or are inconsistent with the customer's stated business or investment strategy.
  • Upon request, the customer refuses to identify or fails to indicate any legitimate source for his or her funds and other assets.
  • The customer (or a person publicly associated with the customer) has a questionable background or is the subject of news reports indicating possible criminal, civil, or regulatory violations.
  • The customer exhibits a lack of concern regarding risks, commissions, or other transaction costs.
  • The customer appears to be acting as an agent for an undisclosed principal, but declines or is reluctant, without legitimate commercial reasons, to provide information or is otherwise evasive regarding that person or entity.
  • The customer has difficulty in describing the nature of his or her business or lacks general knowledge of his or her industry.
  • The customer attempts to make frequent or large deposits of currency, insists on dealing only in cash, or asks for exemptions from the Company's policies relating to the deposit of cash.
  • The customer engages in transactions involving cash or cash equivalents or other monetary instruments that appear to be structured to avoid the Rs.10,00,000 government reporting requirements, especially if the cash or monetary instruments are in an amount just below reporting or recording thresholds.
  • For no apparent reason, the customer insists for multiple accounts under a single name or multiple names, with a large number of inter-account or third-party transfers.
  • The customer engages in excessive journal entries between unrelated accounts without any apparent business purpose.
  • The customer requests that a transaction be processed to avoid the Company 's normal documentation requirements.
  • The customer, for no apparent reason or in conjunction with other red flags, engages in transactions involving certain types of securities, such as Z group and T group stocks, which although legitimate, have been used in connection with fraudulent schemes and money laundering activity. (Such transactions may warrant further due diligence to ensure the legitimacy of the customer's activity.)
  • The customer's account shows an unexplained high level of account activity
  • The customer maintains multiple accounts, or maintains accounts in the names of family members or corporate entities, for no apparent purpose.
  • The customer's account has inflows of funds or other assets well beyond the known income or resources of the customer.
  • The information provided by the customer that identifies a legitimate source for funds is false, misleading, or substantially incorrect.

When an employee of the Company detects any red flag he or she will escalate the same to the Principal Officer for further investigation.

Broad categories of reason for suspicion and examples of suspicious transactions for an intermediary are indicated as under
  • Identity of Client
    • False identification documents
    • Identification documents which could not be verified within reasonable time
    • Non-face to face client
    • Doubt over the real beneficiary of the account
    • Accounts opened with names very close to other established business entities
transactions for an intermediary are indicated as under
  • Suspicious Background
    • Suspicious background or links with known criminals
  • Multiple Accounts
    • Large number of accounts having a common account holder, introducer or authorized signatory with no rationale
    • Unexplained transfers between multiple accounts with no rationale
  • Activity in Accounts
    • Unusual activity compared to past transactions
    • Use of different accounts by client alternatively
    • Sudden activity in dormant accounts
    • Activity inconsistent with what would be expected from declared business
    • Account used for circular trading
  • Nature of Transactions
    • Unusual or unjustified complexity
    • No economic rationale or bonafide purpose
    • Source of funds are doubtful
    • Appears to be case of insider trading
    • Investment proceeds transferred to a third party
    • Transactions reflect likely market manipulations
    • Suspicious off market transactions
    • Value just under the reporting threshold amount in an apparent attempt to avoid reporting
    • Large sums being transferred from overseas for making payments
    • Inconsistent with the clients apparent financial standing
    • Inconsistent with the clients apparent financial standing
    • Block deal which is not at market price or prices appear to be artificially inflated/deflated

Reporting to FIU IND

Policy

The Company will report the Cash and Suspicious Transaction report to the Director, FIU-IND, New Delhi.

We will not notify any person involved in the transaction that the transaction has been reported, except as permitted by the PMLA Act and Rules thereof.

We will not base our decision on whether to file a Suspicious Transactions Report solely on whether the transaction falls above a set threshold. We will file a STR and notify law enforcement of all transactions that raise an identifiable suspicion of criminal, terrorist, or corrupt activities.

Procedure

For Cash Transaction Reporting (CTR), all dealing in Cash that requiring reporting to the FIU IND will be done within 15 days of the succeeding month, in the Cash Transaction Report format electronically.

For Suspicious Transactions Reporting (STR) all the transactions requiring reporting will be done to the FIU IND within 7 working days of the establishment of suspicion at the level of Principal Officer.

This will be in cases where we know, suspect, or have reason to suspect
  • the transaction involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity as part of a plan to violate or evade any the transaction reporting requirement
  • the transaction is designed, whether through structuring or otherwise, to evade the any requirements of PMLA Act and Rules framed thereof
  • the transaction has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and we know, after examining the background, possible purpose of the transaction and other facts, of no reasonable explanation for the transaction, or
  • the transaction involves the use of the Company to facilitate criminal activity

All STRs will be reported quarterly to the Board of Directors, with a clear reminder of the need to maintain the confidentiality of the STRs

Preservation of Anti Money Laundering (AML) Records and Transactions

Policy

The Company will retain and preserve the records for the prescribed time period. We will hold STRs and any supporting documentation confidential.

We will hold STRs and any supporting documentation confidential. Procedure- Principal Officer will be responsible to ensure that AML records are maintained and preserved properly for the period of 10 years. Where the records relate to on-going Investigations or transactions which have been the subject of a suspicious transaction reporting, they should be retained until it is confirmed that the case has been closed.

We will not inform anyone outside of a law enforcement or regulatory agency or securities regulator about a STR. We will refuse any requests for STR information and immediately tell FIU IND of any such request we receive. We will segregate STR filings and copies of supporting documentation from other Company books and records to avoid disclosing STR filings. Our Principal Officer will handle all requests or other requests for STRs.

As part of our AML program, the Principal Officer will maintain STRs and CTRs and relevant documentation on customer identity and verification. We will maintain STRs and their accompanying documentation for at least ten years. Where the records relate to on-going Investigations, they will be retained until it is confirmed that the case has been closed.

Training Programs

Policy

We will develop ongoing employee training under the leadership of the Principal Officer

Procedure

Our training will occur on at least an annual basis. It will be based on our Company’s size, its customer base, and its resources

Our training will include, at a minimum
  • how to identify red flags and signs of money laundering that arise during the course of the employees’ duties
  • what to do once the risk is identified;
  • what employees' roles are in the Company's compliance efforts and how to perform them;
  • the Company's record retention policy; and
  • the disciplinary consequences (including civil and criminal penalties) for non-compliance with the PMLA Act.

We will develop training in our Company, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures, and explanatory memos.

We will review our operations to see if certain employees, such as those in compliance, margin, and corporate security, require specialized additional training. Our written procedures will be updated to reflect any such changes.

Program to Test AML Program

Policy

The Company’s AML program will be tested and reviewed annually

Procedure

The testing of our AML program will be performed by the Statutory Auditors of the Company After the testing, the Auditor will report its findings to the Board of Directors. They will address each of the resulting recommendations.

Recruitment and Monitoring Employee Conduct and Accounts

Policy for recruitment of personnel

The HR department is instructed to cross check all the reference and should take adequate safeguards to establish the authenticity and genuineness of the person befor recruiting the department should obtain the following documents

  • Photographs
  • proof of address
  • identity proof
  • references
  • retention of records

We will subject employee accounts to the same AML procedures as customer accounts, under the supervision of the Principal Officer. We will also review the AML performance of supervisors, as part of their annual performance review. The Principal Officer’s accounts will be reviewed by the Board of Directors

Confidential Reporting of AML Non-Compliance

Employees will report any violations of the Company’s AML compliance program to the Principal Officer, unless the violations implicate the Compliance Officer, in which case the employee shall report to the Chairman of the Board, Shri Ramesh Chandra Manya. Such reports will be confidential, and the employee will suffer no retaliation for making them.

Updating the policy

Above said policy is reviewed on 31/03/15 by us to keep it updated as per the various amendments in the PMLA rules on least once in every six month by our directors.

Board of Directors Approval

We approve and undertake the responsibility of implementation this AML program as reasonably designed to achieve and monitor our Company’s ongoing compliance with the requirements of the PMLA and the implementing regulations under it.

Kalpataru Multiplier Ltd.

Kalpataru is a wishful Devine Tree and in present context a widely Trusted, Time tested and Transparent Share Broker, Investment Advisor and D.P. of this region.

registration nos:

Kalparatu Multiplier Ltd.: Bombay Stock Exchange Ltd. (BSE): SEBI Regn. No. INB011115236, MEMBER ID : 3016, National Stock Exchange Ltd. (NSE) SEBI Regn. No. INB-231115230, MEMBER ID : 11152, Multi Commodity Exchange (MCX): FMC Regn. No. MCX/TCM/PROP/0834,

National Commodities Exchange of India (NCDEX): FMC Regn. No. NCDEX/TCM/PROP/0896, MEMBER ID : 00921 INZ000045136

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