Training session 01/02/2013Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation) Mr....

Prevention of Money Laundering.Training session

01/02/2013Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation)

Mr. Rajesh Agarwal,Principal OfficerSykes & Ray Equities (I) Ltd.

OverviewWhat is Money laundering?Requirements under the ActSREIL policyRelevance to your routineQuestions and Answers

01/02/2013Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation)

What is money laundering?Administered under the Prevention of Money

Laundering Act, 2002 and rules there under.Regulated by many bodies like Enforcement

Directorate, Financial Intelligence Unit, RBI, SEBI and exchanges.

01/02/2013 Sykes & Ray Equities (I) Ltd.Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation)

DefinitionMoney LaunderingDirectly or indirectlyAttempts or assists knowingly or party to any

activityConnected with proceeds of crimeProjecting it as untainted property


Proceeds of crimeProperty or value of such property derived or

obtainedDirectly or indirectlyProperty is a result of crime related to a

“scheduled offence”


Scheduled Offence Against the country

Terrorism, conspiracy, etc Relating to Drugs

Possessing or dealing with Poppy straw, opium, cannabis

Under the Indian Penal Code Murder, Kidnapping, Extortion, counterfeit

notes and securities, etc


Scheduled OffenceUnder the Arms Act

Acquire, possess or use prohibited weaponsWildlife ProtectionImmoral TraffickingPrevention of Corruption Act

Public servant taking bribe, or taking bribe to influence public servant


Requirements under the ActEvery Broker/ Depository Participant/ Sub-Broker shall—

(a) maintain a record of all transactions, the nature and value of which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month;

(b) furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed; (i.e. every month)

(c)verify and maintain the records of the identity of all its clients, in such manner as may be prescribed: (i.e. KYC)


Requirements under the ActHas to maintain the record of:All cash transactions of the value of more than Rs

10 lacs or its equivalent in foreign currency.All series of cash transactions integrally

connected to each other which have been valued below Rs 10 lakhs or its equivalent in foreign currency where such series of transactions 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 demat account, security account maintained by the registered intermediary


SREIL’s policyAs required by the Act and SEBI, SREIL

has adopted a policy to effectively implement these provisions

The objectives are:To protect the company from being used for

Money LaunderingTo follow thorough KYC practicesTo take appropriate action and report any

irregularityTo comply with the applicable laws


Money Laundering processPlacement

The proceeds of crime are injected into the system

Large amounts of money are divided and distributed in a series of accounts

LayeringThe money is spun in different accounts to

different ownerships and jurisdiction to confuse investigators

IntegrationThe proceeds enter a legitimate business and

the financial economy as untainted property01/02/2013 Sykes & Ray Equities (I) Ltd.

Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation)

Suspicious TransactionsFunds derived from illegal activitiesConducted to disguise such fundsNo apparent purposeNot the sort of transaction the customer

would enter intoNo reasonable explanation considering the

background and purpose


ExamplesLarge transactions or patternsClients with links to criminalsFalse ID documents or not face to faceMultiple accountsSudden activity in dormant accountsUse of different accounts alternatelyActivity inconsistent with financial Background.Client of special categoryValue of transactions away from market pricesValue just below threshold amountOff market transactions


Customer Due DiligencePolicy for acceptance of clientsClient identification procedureSuspicious transaction identification and

reporting


Acceptance of clientsIn-person verificationObtain complete information as laid down by

SEBI KYC guidelinesClients of special categoryNot to accept clients who

Have criminal backgroundSubmit fictitious documentsDo not submit mandatory documents


Client identification procedurePAN card- the most reliableOther documents such as election card,

Passport, PSU issued cardsAddress proof such as election/ telephone

bill, bank pass bookOther documents as are relevant to

individuals, firms, companies, trusts, NRIs


Risk profilingCategory A- Low RiskCategory B- Medium RiskCategory C- High Risk


Recent Additional RequirementsSEBI Wide its circular No.

CIR/MIRSD/2/2013 dated January 24, 2013 laid down additional

Guidelines on “Identification of Beneficial Ownership”

For clients other than individuals :The intermediary shall identify the beneficial

owners of the client and take reasonable measures to verify the identity of such persons.


Recent Additional RequirementsFor clients other than individuals or trusts: The identity of the natural person, who, whether acting alone or

together, or through one or more juridical person, exercises control through ownership or who ultimately has a controlling ownership interest.

Controlling ownership interest means ownership of/entitlement to:

i. More than 25% of shares or capital or profits of the juridical person, where the juridical person is a company;

ii. More than 15% of the capital or profits of the juridical person, where the juridical person is a partnership; or

iii. More than 15% of the property or capital or profits of the juridical person, where the juridical person is an unincorporated association or body of individuals.

01/02/2013 Sykes & Ray Equities (I) Ltd.

Recent Additional RequirementsFor client which is a trust:

Where the client is a trust, the intermediary shall identify the beneficial owners of the client and take reasonable measures to verify the identity of such persons, through the identity of the settler of the trust, the trustee, the protector, the beneficiaries with 15% or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership.


Thank YouAny Questions?

[email protected]


mailto:[email protected]

Training session 01/02/2013Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation) Mr....

Documents

Transcript of Training session 01/02/2013Sykes & Ray Equities (I) Ltd. (Strictly For Private Circulation) Mr....