Pratibhuti Vinihit Ltd. had designed this policy of PMLA and effective AML program to prohibit and actively prevent the money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities or flow of illegal money or hiding money to avoid paying taxes. To discourage and identify any Money Laundering or Terrorist financing 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. Maintenance of records of the Nature and Value of Transactions. To protect the interests of investors in securities and to promote the development of and to regulate the securities Market.
This policy provides a detailed Account of the procedures and obligations to be followed to ensure compliance with issues related to KNOW YOUR CLIENT (KYC) Norms, ANTI MONEY LAUNDERING (AML), CLIENT DUE DILIGENCE (CDD) and COMBATING FINANCING OF TERRORISM (CFT).
Policy specifies the need for Additional disclosures to be made by the clients to address concerns of Money Laundering and Suspicious transactions undertaken by clients and reporting to FINANCE INTELLIGENT UNIT (FIU-IND). These policies are applicable to both Branch and Head office Operations and are reviewed from time to time.
Money Laundering can be defined as engaging in financial transaction that involve income derived
from criminal activities, transaction designated to conceal the true origin of criminally derived proceeds
and appears to have been received through legitimate sources/funds.
This is done in below mentioned three phases
1. Placement Phase
2. Layering Phase
3. Integration Phase
Financial Intelligent Unit (FIU)
The government of India set up Financial Intelligent Unit -India (FIU) on 18th November 2004 as an independent body to report directly to the Economic Intelligence council (EIC) headed by the Finance Minister.
FIU-IND has been established as the central national agency responsible for receiving, processing,
analyzing and disseminating information relating to suspect financial transaction. FIU-IND is also responsible for coordinating and stretching efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against Money laundering and related Crimes.
The Prevention of Money Laundering Act, 2002 (PMLA)
The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from 1st July, 2005. Necessary Notifications / Rules under the said Act have been published in the Gazette of India on 1st July 2005 by the Department of Revenue, Ministry of Finance, and Government of India.
As per PMLA, every banking company, financial institution (which includes Chit Fund company, a cooperative bank, a housing finance institution and a non-banking financial company) and Intermediary (which includes a Stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, Portfolio Manager, Investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992) shall have to maintain a record of all the transactions.
“Suspicions Transactions” means a transaction whether or not made in cash which to a person acting in good faith –
(a) Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or
(b) Appears to be made in circumstances of unusual or unjustified complexity; or
(c) Appears to have no economic rationale or bonafide purpose.
The Anti-Money Laundering Guidelines provides a general background on the subjects of money laundering and terrorist financing in India and provides guidance on the practical implications of the PMLA. The PMLA Guidelines sets out the steps that a registered intermediary and any of its representatives, need to implement to discourage and identify any money laundering or terrorist financing activities.
The main objectives of the PMLA are as follows:
1. To have a proper Customer Due Diligence (CDD) 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
4. To monitor and report suspicious transactions.
Pratibhuti Vinihit Ltd being a SEBI registered intermediary complies with the spirit of anti money laundering provisions. To comply with PMLA, the following three specific parameters should be observed, which are related to the overall `Client Due Diligence Process’:
1. Policy for acceptance of clients;
2. Procedure for identifying the clients
3. Transaction monitoring and reporting especially Suspicious Transactions Reporting (STR).
Client / Customer Due Diligence (CDD):
For the purpose of CDD, Broker is dealing with institutional clients. According to SEBI regulation /
rules Institutional clients includes:
2. Mutual Funds
3. Foreign Institutional Investors (FII)
4. Financial Institutions
5. Insurance Companies
According to SEBI, all trades done by institutional client should be settled through Clearing House. In clearing house trade, trades are settled by Broker and custodian of the respective client. In view of above, following steps to be taken to comply with `Customer Due Diligence’ process before registering as client:
1. Obtain basic details for the purpose of the complying with KYC norms prescribed by SEBI.
2. List of Directors and authorized person to trade on behalf of client and copy of Board resolution to that effect.
3. Obtain SEBI registration number.
4. Obtain Custodian details with whom client trade to be settled.
5. Obtain contact details of client front / back office and contact person.
6. Obtain PAN NO. (Income Tax number).
7. Obtain risk Disclosure Document duly executed by prospective client as prescribed by SEBI
Before registering client, obtain antecedent information. Verify independently information submitted by client but not limited to his identity, registered office address, correspondence address, contact details, occupation, Promoters / Directors, source of income, experience in securities market, PAN no. SEBI Registration No. etc. Obtain as many as information.
We give you a unique user name and two passwords for transaction purposes. When you place an order we ask you for the transaction password, which authenticates your identity from our highly secured database. The system also has a feature, which automatically expires your transaction password in 15 days. This would mean we force you to change your password every 15 days for ensuring high security for all your transactions. You can also change your password online at any time. In addition, you can use the Log Off button located throughout the site to securely exit your account without closing your browser.
The system maintains a database of attack signatures which is continuously updated and against which it will scan all incoming traffic to detect any malicious activity or hacking attempts into the site. In the event of a possible attack, it will terminate that session, log the attack details and also alert the administrator.
Please do not reply/respond to any communication, including email, SMS or phone call informing you that your accounts will be closed unless you provide your personal information by responding to such communication or other email address/website/mobile number/phone number, or any communication requiring furnishing of any information personal or otherwise, and representing to be from PGL.
Avoid sending or furnishing personal and financial information on email. Also prior to providing any information (financial or personal) on a website, verify the bonafides of the website, its address and of the owners/operators of such websites. Make sure that the URL (Uniform Resource Locator) that appears in the “address” or “location” box on your browser window is the one you wish to access.
Pratibhuti has a very scientific risk management system in place. The company has a separate surveillance and monitoring department, where highly efficient and experienced personnel are in charge of close monitoring of terminal operations throughout the trading hours. Each and every branch/franchisee is under continuous watch as regards exposures, margins, timely payment of cash and shares, turnover, mark to market profits/losses and so on.