Money laundering has now become one of the major concerns of international financial community. Money Laundering is not just an attempt to disguise money derived from illegal activities. Rather, money laundering is involvement in any transaction or series of transactions that seek to conceal or disguise the nature or source of proceeds derived from illegal activities, including drug trafficking, terrorism, organized crime, fraud and many other crimes.
The objective is to have a system in place for preventing any money laundering financial transaction through us and also to identify, monitor, report any such transaction to appropriate authorities.
“Know Your Customer “(KYC) is the guiding principle behind the Anti-Money Laundering (AML) measures. It incorporates the “Know Your Customer” Standards & “Anti Money Laundering” Measures, hereinafter to be referred as “KYC Standards” and “AML Measures ". The objective of is to “have in place adequate policies, practices and procedures that promote high ethical and professional standards and prevent the Company from being used, intentionally or unintentionally, by criminal elements ". KYC Standards and AML Measures would enable the Company to know/ understand its customers, the beneficial owners, the principals behind customers who are acting as agents and their financial dealings better which in turn will help the Company to manage its risks prudently
The management of the company is fully committed to establish appropriate policies and procedures for ensuring effectiveness and compliance with respect to all relevant legal requirements.
An officer of the company will be designated as “Principal Officer” who will ensure proper discharge of all legal requirements with respect to the same Mr. Mustafa Bhanpuri, Compliance Head is the Principal Officer responsible for
• Compliance of the provisions of the PMLA and AML guidelines
• Act as a central reference point and play and active role in identification & assessment of potential suspicious transactions
• Ensure that Ohm Stock Broker discharges its legal obligation to report suspicious transactions to concerned authorities.
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 transaction is conducted
• Verify the customers identity using reliable independent source document, data or information
• Conduct on-going due diligence and scrutiny of the account/ client to ensure that the transaction conducted are consistent with the clients’ background/ financial status, its activities and risk profile.
The customer due diligence process includes three specific parameters:
• Policy for acceptance of clients : Each client should be met in person Complete KYC to be done for all clients No account to be opened in a fictitious/benami name or on an anonymous basis
• Suspicious Transaction identification and reporting Any unusual activity compared to past transactions Sudden activity in Dormant accounts Sudden High volume / high value transactions
• Central Depository Securities Limited (CDSL) communique no. CDSL/OPS/DP/POLCY/2017/176 dated April 05, 2017 and CDSL/OPS/DP/POLCY/2017/354 dated July 18, 2017, advises that the Beneficial Owners should submit/update their Aadhar Card copy with the Depository Participant. Please ensure that you update your Aadhar Number with Ohm Stock Broker as per the mentioned notices.
The principal officer shall report the nature, amount, date and all related details of any and all suspicious transactions recorded.
• In person verification of the client
• Identify beneficial ownership and control, i.e., determine the persons who beneficially own / control the account.
• Collect information about client's background, occupation and also check the name of the introducer.
• Collect and verify all original documents from the client.
• Collect a certified copy of valid documents showing details of his permanent address, current address, PAN, nature of his occupation, financial status and also a recent photograph.
• For clients trading in F&O segment, documentary proof of his financial details will be collected.
• In case of Corporate client, collect copies of certificate of incorporation, Memorandum of association and other documents as required by SEBI
• In case of Corporate client, collect adequate information of the persons authorised to deal on behalf of the company.
• The client shall be interviewed personally regarding the purpose of opening the account i.e., whether short term trading or long term investment.
• Prior experience in stock market
• Introducer details
All corporate clients must submit annual report every year. In case of individual clients, Client Master details shall be sent to all clients, who will confirm either that the details are updated or shall be advised to submit details if required. He shall also specify his present occupation and financial income details per annum in the same declaration.
The information should be adequate enough to satisfy competent authorities (regulatory/ enforcement authorities) in future that due diligence was observed by us in compliance with the Guidelines.
Failure by prospective client to provide satisfactory evidence of identity should be noted and reported to the principal officer.
Further, we should also maintain continuous familiarity and follow-up with the client where inconsistencies in the information provided are noted.
The account will not be opened where we are unable to apply the above KYC policies, e.g., non co-operation of the client in providing full information etc
SEBI and other authorities suspend or debar persons / entities from participating in securities market on several instances. We as a Broker are required to ensure that such persons do not trade through us.
We shall lay down systems for identifying transactions which is not in consonance with the financial status declared/ shown by the client. Also, unusual activities compared to past transactions, sudden activity in dormant accounts, activity inconsistent from declared business activity, should be traced. This shall require appropriate changes in our back office software.
Systems shall be put in place for identifying transactions likely to be market manipulation, and which appears to be insider trading and also any transaction which seems to have no bonafide intention. Regular communications by means of mailers, SMS, Email are sent to clients at various intervals requesting them to update their latest financial and KYC details available with us.
Role of Compliance Team & Internal Audit: The compliance team will play an important role in ensuring compliance of the above policies and procedures. The account opening team will exercise adequate due diligence as stated above. There will be periodic checking by the Principal Officer and the same report will be properly filed
here is a system of concurrent audit, which will also include ensuring compliance of the
• Due diligence in KYC norms.
• Generation of exception reports
• Trading in dormant client codes
• Level of awareness of staffs
The Exchanges specifies a list of Illiquid Securities where higher due diligence is to be exercised by the Brokers. The list is displayed in our website for client's information. The trade pattern in such scrips by our clients is monitored. In case of high volume in any scrip compared to Exchange volume, the client is asked to submit clarification.
We have policy for ongoing employee training programme so that the total staffs of our company completely aware of the provisions of AML and CFT procedures and amendments thereof. These training programmes are totally focused for frontline staff, back office staff, compliance staff, risk management staff and staff dealing with new customers as it is very crucial that all those concerned fully understand the rationale behind these guidelines, obligations and requirements, implement them consistently and are sensitive to the risks of their systems being misused by unscrupulous elements, if there is any lapse on the part of any staffs of the company.
A register of attendance of participation in such Education/ training program is maintained for the employees, kept secured with the Compliance Department.
As resolved Ohm Stock Broker shall take adequate measures as per its internal policy to prevent money laundering and shall also put in place a frame work for PMLA policy. The policies and procedures as mentioned above shall not be final as it may adopt additional measures to safeguard its interest with respect to activities associated with PMLA.