Thi CIN : U67120PB1991PLC011574

Transcription

1 PMLA POLICY Thi his Policy is applicab able for all the segments ents in relat ation to all the Exchange related ed to Master Commodity Services Ltd as members, MCX, NCDEX, NMCE & ACE. 1. Introdu duction 1.1 The Prevention of money Laundering Act, 2002 (PMLA) was brought into forces with effect from 1 st July Necessary Notifications / Rules under the said Act were published in the Gazette of India on July 01, Subsequently, Forward Markets Commission (FMC) issued necessary guidelines vide its letter no. 07/01/2008-MKT-II dated October 30, 2009 and amendments known as "PMLA Amended Act 2012" which is applicable from 15 th February 2013 to all commodity derivatives market intermediaries. These guidelines were issued in the context of the recommendation made by the Financial Action Task Force (FATF) on Anti Money Laundering standards. Compliance with these standards by all intermediaries and the country has become imperative for international financial relation. The PMLA and rules notified there under impose obligation on banking companies, financial institution and intermediaries to verify identity of clients, maintain records and furnish information to FIU-INDIA. PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime 2. What is Money Launder ering? 2.1Money Laundering may be defined as a process of hiding/camouflaging the source of dirty money obtained from illegitimate activities including drug trafficking, terrorism, organized crime, fraud and through many other crimes, and rendering such money legal. The process of money laundering involves creating a web of financial transactions so as to hide the origin of and true nature of these funds. 1

2 3. Finan nancial al Intell ellig igence Unit (FIU IU)- INDIA 3.1 The government of India set up Financial Intelligence (FIU-INDIA) on November 18, 2004 as an independent body to report directly to the Economic Intelligence Council (EIC) headed by the Finance Minister FIU-INDIA has been established as the central nodal agency responsible, processing, analyzing and disseminating information relating to suspect financial transactions. FIU-IND is also responsible for coordination and stretching efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against money laundering and related crimes. 4. Polic icy of Master Commodity Services Ltd. 4.1 Master Commodity Services Ltd (MCL/Company) has resolved that it would, as an internal policy, take adequate measures to prevent money laundering and shall put in place a frame work to report cash and suspicious transactions to FIU as per the guidelines of PMLA Rules, 2002 & amendments in the said policy by FIU/Other Regulatory Authorities The PMLA policy will be applicable to all the employees, sub-brokers, business associates and Authorized Persons of the company. 5. Implement ntation of this Policy 5.1. The Principal Officer will be responsible for compliance of the provision of the PMLA and AML Guidelines, to act as a central reference point and play an active role in identification & assessment of potentially suspicious transactions. He s h a l l ensure t h a t MCL discharges its legal obligations to report suspicious transaction to the concerned authorities 5.2. The main asp spect of this polic icy is the Cus ustomer Due Diligence which mean ans: a) Obtaining sufficient information about the client in order to identify who is the actual beneficial owner of securities / monies or on whose behalf transaction is conducted. b) Verify the customer's identity using reliable, independent source document, data or information. 2

3 c) 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/his/her activities and risk profile The Cus usto tomer Due Dilig igence includes thre ree speci cific parameter ers: a) Policy for Acceptance of clients b) Client Identification Procedure c) Suspicious Transaction identification & reporting 6. Cus ustomer Acc cceptance Polic icy 6.1. a) Each client should be met in person: n: In-person verification of all the individual clients will, mandatorily, be done by the employee/auhtorized Person/Sub-broker of the Company in accordance with the rules, regulations & bylaws of the exchange/fmc. b) Acc ccept client on whom we are able to app pply appropriate KYC proced edures: Obtain complete information about the client. It should be insured that the initial forms taken by the client are filled in completely. All photocopies submitted by the client are checked against original documents without any exception. Ensure that the 'Know Your Client' guidelines are followed without any exception. All supporting documents, as specified by Forward Markets Commission (FMC) and Exchange, are obtained and verified. C) Do not accept clien ents with iden dentity ty matchi hing persons known to have criminal back ckground: Check whether the Client's identify matches with any person having known criminal background or is not banned in any other manner, whether in terms of criminal or civil proceedings by any enforcement/regulatory agency worldwide. Verification and denial in taking the person as a client if the person is in updated list of individuals and entities which are subject to various sanction measure such as freezing of assets/accounts, denial of financial services etc. as approved by the U N Security Council Resolutions (UNSCRs) uploaded at website, 3

4 d) Be careful whi hile accept pting Clien ents of Special category: y: We should be careful while accepting clients of special category like NRIs, HNIs, Trust, Charities, NGOs, Politically Exposed Persons (PEP), persons of foreign origin, companies having closed share holding/ownership, companies dealing in foreign currency, shell companies, overseas in high risk countries, non face to face clients, clients with dubious background, current/former senior high profile politician, companies offering foreign exchange, etc. or clients from high- risk countries (like Libya, Pakistan, Afghanistan, etc.) or clients belonging to countries where corruption/fraud level is high (like Nigeria, Burma, etc). Scrutinize minutely the records/documents pertaining to clients belonging to aforesaid category. e) Do not acc ccept client regis istration forms whi hich are suspect cted to be fict ctitious: Ensure that no account is being opened in a fictitious/benami name or on an anonymous basic. f) Do not compromis ise on sub ubmissi ission of mand andatory information / documen ents: Client's account should be opened only on receipt of mandatory information along with authentic supporting documents as per the regulatory guidelines. Do not open the accounts where the client refuses to provide information/documents Cus ustomer Identi tific ication Procedu dure (FOR NEW CLIENTS) Objective: To have a mechanism in place to establish identity of the client along with proof of address to prevent opening of any account which is fictitious / benami / anonymous in nature Documents whi hich can be relied ed upon: Documents pertaining to the identity & address proof in accordance with the rules, regulations & byelaws of the exchange/fmc as per the instructions given in the KYC-Part-1 or as amended from time to time as per the guidelines of the exchange/fmc. Futrther, we have to collect updated financial proof from all nonindividual clients. 4

5 7) Risk Profiling of the Client 7.1. We should accept the clients based on the risk they are likely to pose. The aim is to identity clients who are likely to pose a higher than the average risk of money. For this purpose, we need to classify the clients as Low risk, Medium risk and High risk clients. By classifying the clients, we will be in a better position to apply appropriate customer due diligence process. That is, for high risk client we have to apply higher degree of due diligence In order to achieve this objectives, all new clients should be classified in the following category: Low Risk Clients - Category 0 This category of clients having income below Rs 5 lacs or networth below Rs 25 lacs. Medium Risk Clients - Category 1 This category of clients having income Rs 5 lacs to Rs 25 lacs or networth between Rs25 lacs to Rs 1 crore. High Risk Clients - Category 2 This category of clients includes following:- i. Clients having income above Rs 25 lacs or having networth above Rs 1 crore ii. iii. Clients of Special Category (CSC) which includes NRI, Trust, Societies, Nonprofit/Charitable Organization etc. Politically exposed Persons(PEP) & Related PEP The above categorization shall not be influenced by what value the services or other facilities, Company envisages to provide the respective client Apart from this we need to exercise extra caution while monitoring the transactions of clients of special category (CSC) On regular basis, the client risk profile shall be changed with change in client income detail, status or any other risk criteria as set out in point no 7.2 above 5

6 8) Susp uspici icious Tran ansactions All concerned officers are required to analyze documents/information received and furnish details of any suspicious transactions, without undue delay in analysis and arriving at a conclusion What is Suspicious Transaction: Suspicious transaction means a transaction including an attempted 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 circumstance of unusual or unjustified complexity; or appear 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. Reasons for Suspicion: Identity of client Clients in high-risk jurisdiction Doubt over the real beneficiary of the account Accounts opened with names very close to other established business entities Suspicious background or links with criminals Client appears not to be cooperative Nature of Transactions Unusual or unjustified complexity Source of funds is doubtful Transactions reflect likely market manipulation Value of Transaction Value just under the reporting threshold amount in an apparent attempt to avoid reporting Inconsistent with the clients apparent financial standing Large deal which is not at market price or price appears to be artificially inflated/deflated 6

7 The Principle Officer shall set certain filters, the parameters of which are confidential for the purpose of this policy note The Principal Officer will review all the transactions thrown out by the filters and evaluate whether the transactions so thrown out by the filters and decide on a case-to case basis to report to FIU with in stipulated time with complete details What to Report: Once there are sufficient grounds for suspicion for reporting, the STR will be filed in accordance with the details required as per FIU guidelines. 9. Training of staff on AML guidel elines: Staff Members to be trained about Anti Money Laundering & Combating Financing of Terrorism from time to time. Training should be provided to the staff members, particularly, of Compliance, Accounts, Sales & Risk Department. 10. Record keeping The Company shall maintain and preserve 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 intermediary has ended or the account has been closed, whichever is later The records shall be maintained & preserved for a period of 5 years from the date of cessation of the transaction. Records shall be in a manner, facilities its easy retrieval as and when required to enable reconstruction of any transaction 11. Principal Offic icer & Designated Director Mr. Avdish Mathur, Asst. Manager of the company, is appointed by the Board of Directors of the company at its meeting held on 19 th January, 2013 as the Principal Officer of the company in accordance with the guidelines issued on Prevention of Money Laundering Act (PMLA), 2002 by FMC. 7

8 Mr. Harinder Singh, Whole Time Director of the company has been appointed by the Board of Directors of the Company at its meeting held on , as Designated Director in terms of the Rule 2(ba) of the PMLA Rules to ensure overall compliance of the obligations imposed under Chapter IV of the Act. The Principal Officer, shall send all the information/reports with respect to his observations regarding the analysis/due diligence, STR, CTR etc to the Designated Director before forwarding the same to FlU-IND. Surve rveill llan ance in sync with AML- The Surveillance Team will work in tandem with compliance and will take care of all the activities of clients, branches, authorized persons, sub-brokers and other concerned persons of the organization who are in access of any kind of information or are in any way related to the Co m p a ny. 8