Anti-Money Laundering Policy

SEBI Registered Investment Advisers Registration No. INA200016193

This Anti-Money Laundering (AML) Policy (the Policy) has been prepared in accordance Prevention of Money Laundering Act, 2002 (PMLA Act) and takes into account the provisions of the PMLA Act and other Rules laid down by SEBI as per the Master Circular dated 15.10.2019.

Prevention of Money Laundering Act, 2002 (PMLA) forms the core of legal framework put in place by India to combat money laundering and related crimes. PMLA and the Rules notified there under came into force from 1st July, 2005. Under PMLA, all the entries registered with SEBI are required to furnish information of all the suspicious transactions whether or not made in cash to FIU-IND. Under Section 3 of PMLA, projecting of crime as untainted property is an offence of money laundering liable to be punishment under section 4 of the PMLA.

Money Laundering involves disguising financial assets so that they can be used without detection of the illegal activity that produced them. Through money laundering, the launderer transforms the monetary proceeds derived from criminal activity into funds with as apparently legal source.

Financial Intelligence Unit-India (FIU-IND) is the central national agency of India responsible for receiving, processing, analyzing and disseminating information of suspect financial transactions. FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in combating money laundering and related crimes.

Section 2 (1) (g) of PMLA Rules defines suspicious transaction whether or not made in cash which, to a person acting in good faith:

  • Gives rise to a reasonable ground of suspicious 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 bonafied purpose; or
  • Gives rise to a reasonable ground of suspicious that it may involve facing of the activities relating to terrorism

Some examples of suspicious transactions reported to FIU-IND are as under:

Category

Examples of Suspicious transactions

Identity of Clients

  • Identification documents were found to be forged
  • Address details given by the account holder were found to be false
  • Doubt over the real beneficiary of the account

Suspicious  Background

  • Positive match of name and date of births with person on various lists
  • Account of publicly known criminals

Multiple Accounts

  • Large number of accounts having a common account holder, introducer or authorized Signatory with no rational or bono fide purpose
  • Unexplained transfers between multiple accounts with no rationale

Activity in Accounts

  • Unexplained activity in dormant accounts
  • Unexplained activity in account inconsistent with what would be excepted from declared Business

Nature of Transactions

  • Doubtful sources of Funds
  • Doubtful overseas fund transfer
  • Doubtful foreign remittance to non-relatives
  • Doubtful cash deposits in a bank account at multiple locations
  • Suspicious us of ATM/Credit card
  • Doubtful foreclosure of loan account in cash
  • Suspicious off-market transactions in demat accounts

Value of transactions

  • Multiple transactions of value just under the reporting threshold amount in an apparent attempt to avoid reporting
  • Unexplained large value transaction inconsistent with the client’s apparent financial Standing
  1.  

For the purpose of PMLA, transactions include:

  1. All cash transactions of the value of more than Rs 10 lakhs or its equivalent in foreign currency.
  2. All series of cash transactions integrally connected to each other which have been valued below Rs 10 lakhs or its equivalent in foreign currency, such series of transactions within one calendar month.
  3. 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.

This Policy only supplements the existing SEBI / FIU guidelines relating to Anti Money Laundering and any subsequent guidelines from the date of the Policy on Anti Money Laundering will be implemented immediately.

Hence the objective of the policy is to

  1. To have a proper Client Due Diligence Process thru KYC process before registering clients.
  2. To monitor/maintain records of all cash transactions of the value of more than Rs.10 lacs.
  3. To maintain records of all series of integrally connected cash transactions within one calendar month.
  4. To monitor and report suspicious transactions.
  5. To discourage and identify money laundering or terrorist financing activities.
  6. To take adequate and appropriate measures to follow the spirit of the PMLA.

Client Due Diligence Process:

The KYC information to be collected in the specified format ‘KYC Details’ which contains all information required as per SEBI KYC requirements including ‘In Person Verification’ (IPV). In addition, the information about FATCA declaration also to be collected. All original PAN Cards/ Address Proof/ Aadhar Cards to be signed and self-attested copies to be taken. For NRIs, additional details and copies of Passport / PIO Card/ OCI Card and their address in overseas country along with their Tax Identification No. in that country to be collected.

Investment adviser shall not take a client on-board where Investment adviser is unable to apply appropriate customer due diligence measures i.e. it is unable to verify the identity and / or obtain documents required due to non-cooperation of the customer or non-reliability of the data / information furnished to Investment adviser.

The guidelines for risk categorization for various type of clients is given below:

 

Type

Recommended Risk Categorisation

Risk Perception

Salaried

Low risk

Source on income is fixed and pattern of entries in the account can be correlated with known sources of income/ expenditure

Senior citizens

Low/ Medium Risk

Source of income not known clearly. May be operated by third parties.

Housewife

Low/ Medium Risk

Source of income not known clearly. May be operated by third parties.

Self Employed Professionals/ Businessmen

Low risk (except professionals associated with the film industry who will be categorized as “Medium” risk).

Accounts maintained by Chartered Accountants, Architects, Doctors, Lawyers, Sportsmen, etc.

Non-Resident Individuals

Low / Medium risk

The accounts are opened only after IPV. In case an IPV is not performed and we have relied on documentation submitted by the client, the account would be categorised as medium risk.

Politically Exposed Persons

High Risk

Politically exposed persons are individuals who are some political party officials/ members. INVESTMENT ADVISER to check all the information available on the person in the public domain, verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. Such accounts should be subjected to enhanced monitoring on an ongoing basis. The above norms should also be applied to the accounts of the family members and close relatives of PEPs



Maintenance of records of transactions

Investment Adviser shall have a system of maintaining proper record of all transactions including records of all transactions prescribed under Rule 3 of the Rules, as mentioned below:

  1. all cash transactions of the value of more than Rupees Ten Lakh or its equivalent in foreign currency.
  2. all series of cash transactions integrally connected to each other which have been valued below Rupees Ten Lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds Rupees Ten Lakh;

Information to be preserved

Investment Adviser shall maintain the following information in respect of transactions referred to in Rule 3:

  1. the nature of the transactions.
  2. the amount of the transaction and the currency in which it was denominated.
  3. the date on which the transaction was conducted.
  4. the parties to the transaction.

Maintenance and Preservation of records

Investment Adviser shall maintain and preserve the records of all transactions referred to above for a period of 5 years as required by PMLA & SEBI Act.

Investment Adviser shall ensure that records pertaining to the identification of the customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN, card, utility bills etc.) obtained while opening the account and during the course of business relationship, are properly preserved for 5 years as would be required under the PMLA and SEBI Act even after the business relationship is ended.

Reporting to Financial Intelligence Unit-India

Investment Adviser shall report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) in respect of transactions referred above.

Suspicious Transaction Reports (STR)

The Suspicious Transaction Report (STR) shall be furnished within 7 days of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature mentioning the reasons for treating any transaction or a series of transactions as suspicious.

We, Moneydhan Investment Advisory India LLP (“Investment Advisor”), a registered investment advisor, with SEBI Registration No. INA200016193, are implementing above AML guidelines as a guiding principles for our investment advisory activities. The guidelines would be applicable to us along with our employees and associates.

………………………………………………….

For,

Moneydhan Investment Advisory India LLP

SEBI Registered Investment Advisers 

Registration No. INA200016193

Date:

Moneydhan Investment Advisory India LLP

SEBI Registered Investment Advisers Registration No. INA200016193 
(Type of Registration- Non-Individual, Validity of Registration- Perpetual)

Address:  KMC XXX/1242 B1 , First Floor, Opposite Government Hospital, Kothamangalam P.O, Kothamangalam, Ernakulam District, Kerala , India – 686691

Contact No: 91 9895236064, Email: sujith@moneydhan.com

SEBI regional/local office address – 6th Floor, Finance Tower, Kaloor, Kochi – 682017, Kerala

Principal Officer: Mr. Seshadri K Iyengar, Contact No: 91 9886052628, Email: seshadri@moneydhan.com