Risk Management & Procedures Manual

Transcription

1 Pulp International Business LTD Regulated By Cyprus Securities and Exchange Commission License No. 095/08 P.O. Box 53834, Limassol CY-3318, Cyprus, Tel: , Fax: (in relation to money laundering control and the combating of the financing of terrorist and related activities) January 2014

2 Table of Contents Subject Page Introduction 3 Scope 3 Key Principles and Objectives 4 What is Money Laundering? 4 Customers Risk Classification 5 Low Risk Customers 5 Normal Risk Customers 5 High Risk Customers 5 Customer Acceptance Policy 6 Customer Identification Procedure 6 Procedure #1: Customer identification 6 Procedure #2: Due diligence for High risk customer 7 Procedure #3: Customer identification requirements 8 Documentation Requirements 9 Monitoring of Transactions 10 Suspicious Transactions 10 Indicative list of suspicious transactions 11 Reporting to MOKAS 12 Annual Money Laundering Compliance Report 12 Risk Management 13 Internal Audit 13 Employee Training 13 Customer Education 13 Introduction of New Technologies 13 Applicability to branches and subsidiaries outside Cyprus 13 Appointment of compliance Officer 14 Record Keeping/Maintenance 14 Maintenance of records of transactions 14 Information to be preserved 14 Record Keeping Mechanism 14 Review of this Manual 15 Page 2

3 Introduction Inadequate understanding of a client's background and purpose for utilizing a trading account may expose Pulp International Business Ltd. (the company) to a number of risks. According to the DIRECTIVE DΙ of the Cyprus Securities and Exchange Commission (CySec) for the prevention of money laundering and terrorist financing, CIF s should develop clear client acceptance policies and procedures, including a description of the types of client that are likely to pose a higher than average risk to the company so that more extensive due diligence may be applied to higher risk clients. Factors such as a client's background, country of origin, public or highprofile position, linked accounts, business activities or other risk indicators should be considered. This procedures extends beyond the application of enhanced due diligence when establishing a new client relationship (client acceptance). It further defines policies and procedures regarding client retention, monitoring and disengagement for the purposes of money laundering control and the combating of the financing of terrorist and related activities. Through this procedures manual, FXPULP stands committed to (a) Accept only those clients whose identity is established by conducting due diligence appropriate to the risk profile of the client. (b) Record and preserve audit trail for the transactions conducted by customers to facilitate investigation. (c) Report to the Unit for Combating Money Laundering MOKAS, or any other agency designated by the Cyprus Securities and Exchange Commission (CySec) or Government of Cyprus, the details of transactions of all or selected clients if and when requested or at regular frequency as may be suggested by such agencies, and (d) Cooperate with investigative agencies / law enforcement agencies in their efforts to trace the money laundering transactions and persons involved in such transactions. Scope In scope this procedures and policies applies to all branches/offices of the company and is to be read in conjunction with related operational guidelines issued from time to time. These procedures address the responsibility of management and employees for: creating and implementing policies, procedures and plans related to client acceptance, maintenance and monitoring; customer due diligence; declining or terminating business relationships or transactions; training in client acceptance, maintenance and monitoring; monitoring accounts, activities, policies, procedures and plans; awareness and communication; and management reporting. Page 3

4 Key Principles and objectives This procedure manual has the following key principles and objectives: The company will introduce necessary policies and procedures to ensure that the risk of possible money laundering or the financing of terrorist and related activities associated with client relationships and transactions is managed and mitigated. Customer due diligence procedures with regard to business relationships and transactions will be developed and implemented as required by legislation. To establish a business relationship with a potential client, appropriate information has to be obtained from the person seeking to establish the relationship. The information obtained is to be verified by comparing it with information obtained from source(s) as required by legislation. The company may decline or terminate business relationships or transactions where there appears to be a risk that its services and infrastructure will be abused for the purposes of money laundering and/or terrorist financing. The company will provide the appropriate training to all affected employees on client acceptance, maintenance and monitoring. The company will proactively monitor adherence to this procedures manual, ensuring compliance with its obligations as required by legislation. Affected company employees must be made aware of the contents of this manual, inclusive of their responsibilities and actions expected of them. Management reports must be produced to allow the company actively and effectively to monitor client acceptance, maintenance and monitoring initiatives. What is Money Laundering? Money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of criminal activities. If successful, money can lose its criminal identity and appear legitimate. Under a broad definition, the laundering process is accomplished in three stages: (a) Placement the physical disposal of cash proceeds derived from criminal activity. (b) Layering separating the illicit proceeds from their source by creating complex layers of financial transactions designed to disguise the audit trail and provide anonymity. (c) Integration the provision of apparent legitimacy to wealth derived from crime. If the layering process is succeeded, integration schemes place the laundered proceeds back into the economy in such a way that they re-enter the financial system appearing as normal business funds. Page 4

5 Customers Risk Classification The level of Money Laundering (ML) risks that the company is exposed to by an investor relationship depends on the following factors: Customer s background. Type and nature of business activities. Type of product / service availed by the customer. Country where the Customer is domiciled. Anticipated level and nature of business transactions. Source and origin of funds. Based on the above factors/criteria, and for acceptance and identification, customers are categorized broadly into low risk, medium risk, and high risk categories. Low risk customers For the purpose of this procedures-manual, Low Risk customers will be individuals and entities whose identities and sources of wealth can be easily identified, have structured income and transactions in whose accounts by and large conform to the known profile. Illustrative examples of low risk customers could be: (a) Salaried applicants with salary paid by cheque. (b) People belonging to government departments. (c) People working with government owned companies, regulators and statutory bodies, etc. (d) People belonging to lower economic strata of the society whose accounts show small balances and low turnover. (e) People working with Public Sector Units. (f) People working with reputed Public Limited companies & Multinational Companies. Normal Risk customers Illustrative examples of medium risk customers could be: (a) Salaried applicants with variable income/unstructured income receiving salary in cheque. (b) Salaried applicants working with Private limited companies. (c) Self Employed professionals. (d) Self Employed customers with sound business and profitable track record for a reasonable period. (e) High Net worth Individuals with occupational track record of more than 3 years. High risk customers For the purpose of this procedures-manual, High Risk customers will be individuals and entities that are likely to pose a higher than average risk to the company. Examples of high risk customers requiring higher due diligence may include: (a) Non-resident customers, (b) Non-face to face customers. (c) High net worth individuals, without an occupational track record of more than 3 years. (d) Politically exposed persons (PEPs). (e) Firms with 'sleeping partners' or bearer shares. (f) Companies having close family shareholding or beneficial ownership. (g) Trusts, charities, NGOs and organizations receiving donations. (h) Those with dubious reputation as per available public information. (i) Clients in Non Cooperative Countries and Territories as classified by FATF. Page 5

6 Customers Acceptance Policy The Customer Acceptance Policy will ensure the following aspects of customer relationship: Where the customer is a new customer, account must be opened only after ensuring that pre account opening Know Your Client (KYC) documentation and procedures are conducted; If the customer is an existing customer and no KYC is conducted, it should be ensured that the identification of the customer is completed by No account is opened in anonymous or fictitious name(s); No account is opened where the Company is unable to apply appropriate customer due diligence measures, i.e. the Company is unable to verify the identify and /or obtain documents required as per the risk categorization due to non co-operation of the customer or non reliability of the data/information furnished to the Company. Risk in terms of the location of customer and mode of payments are duly checked; volume of turnover, social and financial status, etc. will form the basis for categorization of customers into low, normal and high risk ; customers requiring very high level of monitoring, e.g. Politically Exposed Persons will be given due consideration. Documentation requirements and other information will be collected in respect of different categories of customers. Declaration will be taken from the customer that the proceedings/transactions are not in violation of the N188(I)-2007 law and CySec directives in this regard. The customer profile will be a confidential document and details contained therein shall not be divulged for cross selling or for any other purposes against monetary consideration. Customer Identification Procedure Procedure #1: Customer identification means identifying the customer and verifying his/ her identity by using reliable, independent source documents, data or information while establishing a relationship. The Company will obtain sufficient information such as Passport, National ID Card, Driving License, etc. necessary to establish, to our satisfaction, the identity of each new customer, whether regular or occasional and the purpose of the intended nature of relationship. It will be ensured that due diligence is observed based on the risk profile of the customer; the nature of information/documents required will also depend on the type of customer (individual, corporate etc). For customers that are natural persons, The Company has to obtain sufficient identification data to verify the identity of the customer, his address/location, and also his recent photograph. The Company collects identity proof, bank account details and applicant's occupation. Page 6

7 For customers that are legal persons or entities, the Company will: (i) verify the legal status of the legal person/ entity through proper and relevant documents, (ii) verify that any person purporting to act on behalf of the legal person/entity is so authorized and identify and verify the identity of that person and For (i) & (ii) Memorandum of Association and board resolution will be collected to ensure that the person purporting to act on behalf of the legal person/entity is authorized to do so, apart from applicable field/document investigations. In case of partnership firm, a copy of partnership deed along with the registration certificate of the firm, if registered and power of attorney in favor of the person purporting to act on behalf of the firm shall be collected. In order to authenticate the identity of the person so purporting to represent the Company/Firm, Signature verification / attestation shall be done either from the Banker or copy of passport, driving license to be taken. (iii) Understand the ownership and control structure of the customer and determine who are the natural person(s) who ultimately control the legal person. For this the Company will collect Shareholding letter duly certified by the Company Secretary/company's Auditor/Chartered accountant and Necessary Resolution/authorization etc. Procedure #2: Due diligence for High risk customer identification will be as follows: (a)non-resident customers, due diligence including verification of employment of the customer, collection of a local guarantor & power of attorney along with their identification proofs and verification of their residence/office will be done, if found necessary. (b) High net worth individuals, with less than three years occupational track record due diligence including personal discussion with the applicant, analysis of bank statement and financial statements will be done, details of client profile, sources of fund will be obtained, if required. (c) Trusts, charities, NGOs and organizations receiving donations, as and when such cases are received due diligence to be undertaken as for other cases in the high risk categories. (d) Companies having close family shareholding or beneficial ownership, due diligence including personal discussion with the applicant will be done. In case of company's proportionate income being considered to the extent of the customer's Shareholding in the company- board resolution authorizing the director(s) to sign on behalf of the company will be collected. Also signature verification of the person(s) issuing the board resolution will be collected, if necessary. (e) Firms with 'sleeping partners', due diligence including personal discussion with the applicant will be done. If income of the partnership firm is being considered then the Company will collect a letter signed by all the partners authorizing the concerned partner(s) to sign on behalf of the partnership to be continued. Also signature verification of the person(s) issuing this authority letter will be collected, if necessary. (f) Politically exposed persons (PEPs), due diligence including telephonic/personal discussions be done. Information from reliable sources will be obtained for establishing the existence of the person. Page 7

8 (g) Non-face to face customers, due diligence including telephonic/personal discussions be done, if required. Information from reliable sources will be obtained for establishing the existence of the person. (h)those with dubious reputation as per public information available, etc. If found dubious then the case will not be entertained. Procedure #3: Customer identification requirements in respect of a few typical cases, especially, legal persons requiring an extra element of caution are given below: (a)trust/nominee or Fiduciary Accounts There exists the possibility that trust/nominee or fiduciary accounts can be used to circumvent the customer identification procedures. Hence, as and when such cases are received, the Company will determine whether the customer is acting on behalf of another person as trustee/nominee or any other intermediary. If so, the Company may insist on receipt of satisfactory evidence of the identity of the intermediaries and of the persons on whose behalf they are acting, as also obtain details of the nature of the trust or other arrangements in place. In the case of a 'foundation', steps will be taken to verify the founder managers/directors and the beneficiaries, if defined. (b) Accounts of companies and firms The Company will be careful while processing the cases of business entities especially to establish that individuals are not using those entities for maintaining accounts with it. The Company shall seek information, if required, on the control structure of the entity, source of funds and the natural persons who carry a controlling interest in the management. These requirements may be moderated, for example in the case of a public company it will not be necessary to identify all the shareholders. (c)client accounts opened by professional intermediaries When the Company has knowledge or reason to believe that the client account opened by a professional intermediary like Direct Selling Agent or Direct selling team or any other sales intermediary by whatever name called is on behalf of a single client, that client will be identified. Where the Company relies on the 'customer due diligence' (CDD) done by an intermediary like Field investigation agency or technical agency or lawyer or any other operation processing intermediary by whatever name called, the Company will ensure that the intermediary is having an established track record. (d)accounts of Politically Exposed Persons (PEPs) Politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. The Company will gather sufficient information as available on any person/customer of this category intending to establish a relationship and check all the information available on the person in the public domain. The Company will verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. The above norms may also be applied to the accounts of the family members or close relatives of PEPs. Page 8

9 (e) Accounts of non-face-to-face customers In the case of non-face-to-face customers, apart from applying the usual customer identification procedures, The Company will do telephonic/personal discussion with the applicant, if necessary. Applicant will be met by the Sales representative of the Company and will fill up the meeting sheet on that basis to mitigate the higher risk involved, as applicable. Certification of all the documents presented may be insisted upon and, if necessary, additional documents may be called for and applicable verification of these documents will be done. In the case of cross-border customers, there is the additional difficulty of matching the customer with the documentation and the Company may have to rely on third party certification/introduction. In such cases, it will be ensured that generally the third party is a regulated and/or supervised entity with an established track record. Documentation Requirements Features to be verified and documents that may be obtained from customers: Individuals Proof of Identity Proof of Address Companies Features - Name of the company - Principal place of business - Mailing address of the company - Telephone/Fax Number Partnership Firms -Legal name -Address -Names of all partners and their Addresses -Telephone numbers of the firm and partners Documents One certified copy of any one of the following: (i) Passport (ii) National ID Card (iii) Driving license (iv) Proof of identity and address can also be established by any document containing the photograph, address and signature, duly attested by a notary public. One original document of any one of the following: (i)telephone bill (ii)account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) Letter from employer (vi) Proof of identity and address can also be established by any document containing the photograph, address and signature, duly attested by a notary public. certified copy of all of the following: (i)certificate of incorporation and Memorandum & Articles of Association. (ii) Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account. (iii) Power of Attorney granted to its managers, officers or employees to transact business on its behalf. (iv) Copy of the telephone bill certified copy of all of the following: (i) Registration certificate, if registered. (ii) Partnership deed. (iii) Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf. (iv) Any officially valid document identifying the partners and the persons holding the Power of Attorney and their Page 9

10 Trusts and Foundations - Names of trustees, settlers, beneficiaries and signatories. -Names and addresses of the founder, the managers/directors and the beneficiaries - Telephone/fax numbers. Addresses. (v) Telephone bill in the name of firm/partners certified copy of all of the following: (i)certificate of registration, if registered. (ii)power of Attorney granted to transact business on its behalf. (iii) Any officially valid document to identify the trustees, settlers, beneficiaries and those holding Power of Attorney, founders/ managers/ directors and their addresses. (iv) Resolution of the managing body of the foundation/association (v) Telephone bill Monitoring of Transactions Ongoing monitoring is an essential element of effective risk management procedures. The Administration/Back Office Department and the Company s investment services officers shall have to be monitoring the Client s account for the following qualifying indicators of suspicious Clients: (a) the level of investment activity of the Client is far larger than the original targets, without there being a corresponding obvious increase in the Client s sources of income. (b) the Client s transactions do not match the set investment objectives or market practice. (c) the Client s frequency of transactions is far higher than the one anticipated by the investment plan or market practice. (d) the Client attempts to settle the outstanding transactions in cash. The officers of the two departments shall bear the obligation to report to the Managing Director of the Company (as applicable) or the Money Laundering Compliance Officer, the cases of Clients who potentially: (a) display uncertain creditworthiness (b) are involved in illegal or criminal activities Suspicious Transactions Although it is difficult to define a suspicious transaction, as the types of transactions which may be used by money launderers are almost unlimited, a suspicious transaction shall often be one which is inconsistent with a Client's known, legitimate business or personal activities or with the normal business for that type of account. It is, therefore, imperative that Company officials know enough about their Clients' business in order to recognize that a transaction or a series of transactions is unusual. The following are examples of suspicious Clients that shall have to be reported to the MLCO: (a) Client (natural person) which verification of identity has proven to be particularly difficult and who appears to be cautious in providing details with respect to his identity. (b) Client (legal entity) whereby difficulties or delays in the submission of the relevant documentation are encountered. (c) Client, referred from an overseas bank or from an existing Client, whereby both prospective Client and referring bank or existing Client are residents of countries of lax jurisdictions. Page 10

11 Indicative list of suspicious transactions Money laundering using cash transactions (a) unusually large cash deposits made by an individual or company whose ostensible business activities would normally be generated by cheques or other instruments (b) substantial increases in cash deposits of any individual or business without apparent cause, especially if such deposits are subsequently transferred within a short period out of the account and/or to a destination not normally associated with the Client (c) Clients who deposit cash by means of numerous credit slips so that the total of each deposit is unremarkable, but the total of all the credits is significant (d) frequent exchange of cash into other currencies (e) Clients transferring large sums of money to or from overseas locations with instructions for payment in cash. Money laundering using bank accounts (a) Clients who wish to maintain a number of trustee or Clients' accounts which do not appear consistent with their type of business, including transactions which involve nominee names (b) Clients who have numerous accounts and pay in amounts of cash to each of them in circumstances in which the total of credits would be a large amount (c) any individual or company whose account shows virtually no normal personal banking or business related activities, but is used to receive or disburse large sums which have no obvious purpose or relationship to the account holder and/or his business (e.g. a substantial increase in turnover on an account) (d) reluctance to provide normal information when opening an account, providing minimal or fictitious information or, when applying to open an account, providing information that is difficult or expensive for the Company to verify (e) Clients who appear to have accounts with several banks within the same locality, especially when the Company is aware of a regular consolidation process from such accounts prior to a request for onward transmission of the funds (f) matching of payments out with credits paid in by cash on the same or previous day (g) paying in large third party cheques endorsed in favor of the Client (h) large cash withdrawals from a previously dormant/inactive account, or from an account which has just received an unexpected large credit from abroad (i) Clients who together, and simultaneously, use separate tellers to conduct large cash transactions or foreign exchange transactions (j) Companies' representatives avoiding personal contact with the Company (k) substantial increases in deposits of cash or negotiable instruments by a professional firm or company, using Clients' accounts or an in-house company or trust accounts, especially if the deposits are promptly transferred to/from other Clients' or trust accounts (l) Clients who decline to provide information that in normal circumstances would make the Client eligible for credit or for other banking services that would be regarded as valuable (m) large number of individuals making payments into the same account without an adequate explanation Money laundering involving international activity (a) Client introduced by an overseas branch or affiliate based in countries where production of drugs or drug trafficking may be prevalent (b) use of Letters of Credit and other methods of trade finance to move money between countries where such trade is not consistent with the Client's usual business Page 11

12 (c) Clients who make regular and large payments, including wire transactions, that cannot be clearly identified as bona fide transactions to, or receive regular and large payments from countries which are commonly associated with the production, processing or marketing of drugs (d) building up of large balances, not consistent with the known turnover of the Client's business, and subsequent transfer to account(s) held overseas (e) unexplained electronic funds transfers by Clients on an in and out basis or without passing through an account (f) frequent requests for travelers cheques, foreign currency drafts or other negotiable instruments to be issued (g) frequent paying in of travelers cheques, foreign currency drafts particularly if originating from overseas (h) numerous wire transfers received in an account when each transfer is below the reporting requirement in the remitting country Money laundering involving employees and agents (a) changes in employee characteristics, e.g. lavish life styles (b) any dealing with an agent where the identity of the ultimate beneficiary or counterparty is undisclosed, contrary to normal procedure for the type of business concerned. Reporting to MOKAS The Compliance officer will report information relating to cash and suspicious transactions if detected to the Director, and to the Unit for Combating Money Laundering MOKAS. Annual Money Laundering Compliance Report In the event that this shall be required by CySEC, the MLCO shall be also assigned the duty to prepare the Annual Money Laundering Report, in the manner prescribed by the relevant authorities. In this event, the Money Laundering Compliance Report shall be prepared and submitted to the Company s Senior Management within two months from the end of each calendar year (i.e. at latest, by the end of February). The Company s Senior Management, having studied the contents of the Annual Report, shall take any necessary measures to correct any weaknesses or omissions identified. Following this, a copy of the Annual Report should be submitted to the CySEC within the same time period above. The Annual Report shall cover issues relating to money laundering during the year under review, including, indicatively, the following: (a) information on any amendment to the Law and the Guidance Notes issued by CySEC during the year under review and the measures taken/procedures introduced to comply with the provisions and obligations arising from these amendments (b) important omissions or weaknesses identified by the MLCO or the Company s Internal Auditor in the policies and procedures applied by the Company for the prevention of money laundering, indicating the degree of significance of issues identified and the associated risks. The Annual Report shall also include recommendations for the introduction of corrective measures so as to improve the current position (c) the number of Internal Money Laundering Suspicion Reports submitted by Company personnel to the MLCO, listing brief details as well as any comments and remarks (d) omissions and weaknesses identified in the procedures of internal reporting of suspicious transactions and recommendations for changes and improvements (e) any other information, comments or remarks with respect to communication with the personnel with respect to money laundering issues Page 12

13 (f) the number of reports submitted to the Unit by the MLCO and brief details and information on the principal reasons for the suspicious transactions and observations on any trends (g) summary information on an annual basis of the Clients total cash transaction over the set limit of EUR , or as amended by the relevant authorities. (h) information on any cooperation with and particulars on requests for the provision of information received from the Unit in relation to suspicious transactions reported to the Unit by the MLCO. In addition, the Annual Report shall state the number of court orders issued to the company, in accordance with the provisions of the Law, for the disclosure and provision of information in relation to the investigation of other cases of money laundering (i) information (description, contents, duration) of educational seminars attended by the MLCO and any education material received (j) information regarding the training and education programs offered to the Company s personnel during the course of the year under review, stating the number of personnel that attended their position and duties (k) recommendations as to additional needs in personnel and technological infrastructure, with the objective to achieve complete compliance with the provisions of the Law and the Guidance Notes of CySEC. Risk Management Internal Audit The Company's internal auditors will evaluate and ensure adherence to this procedures manual procedures. As a general rule, the compliance function will provide an independent evaluation of the Company's own policies and procedures, including legal and regulatory requirements. Internal Auditors may specifically check and verify the application of KYC procedures and comment on the lapses observed in this regard. The compliance in this regard will be put up before the Audit Committee of the Board along with their normal reporting frequency. Employee Training The Company will have an ongoing employee training program so that the members of the staff are adequately trained in acceptance procedures. Training requirements will have different focuses for frontline staff, compliance staff and staff dealing with new customers so that all those concerned fully understand the rationale behind the procedures and policies and implement them consistently. Customer Education The Company will educate the customer on the objectives of the acceptance policy so that customer understands and appreciates the motive and purpose of collecting such information. Introduction of New Technologies The Company will pay special attention to any money laundering threats that may arise from new or developing technologies including on-line transactions that may favor anonymity, and take measures, if needed, to prevent their use in money laundering schemes as and when online transactions are started/accepted by the Company. Applicability to branches and subsidiaries outside Cyprus The above guidelines will also apply to the branches and majority owned subsidiaries located abroad, especially, in countries which do not or insufficiently apply the FATF Recommendations, to Page 13

14 the extent local laws permit as and when the Company opens overseas branches. When local applicable laws and regulations prohibit implementation of these guidelines, the same will be brought to the notice of CySec and MOKAS. Appointment of compliance Officer The Company will appoint Compliance Officer.' Compliance Officer is located at the company head office and will be responsible for monitoring and reporting of all transactions and sharing of information as required under the law. He will maintain close liaison with MOKAS, CySec and any other institution which are involved in the fight against money laundering and combating financing of terrorism. He will also ensure that there is proper system of fixing accountability for serious lapses and intentional circumvention of prescribed procedures and guidelines. However, any such action has to be documented and placed before the company s directors. Compliance Officer will also report any unusual matter/information to the board of directors of the company as and when it occurs. Record Keeping/Maintenance Maintenance of records of transactions The Company will maintain proper record of the under mentioned transactions: (i) All cash transactions of the value of more than 10,000 or its equivalent in foreign currency. (ii) All series of cash transactions integrally connected to each other which have been valued below 10,000 or its equivalent in foreign currency where such series of transactions have taken place within a month. (iii) All suspicious transactions as mentioned in the Indicative list of suspicious transactions page 11. Information to be preserved The Company will maintain the following information in respect of transactions referred to in the preceding point on Maintenance of records of transactions : (i) the nature of the transactions; (ii) the amount of the transaction and the currency in which it was denominated; (iii) the date on which the transaction was conducted; and (iv) the parties to the transaction. Record Keeping Mechanism (i) The Company sanctions and disburses files on the system; hence it has a system for proper maintenance and preservation of account information in a manner that allows data to be retrieved easily and quickly whenever required. (ii) The Company will maintain account information for at least five years from the date of cessation of transaction between the company and the client, all necessary records of transactions, which will make available individual transactions (including the amounts and types of currency involved if any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity. (iii) The Company will ensure that records pertaining to the identification of the customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, utility bills etc.) obtained while opening the account and during the course of business relationship, are properly preserved for at least five years after the business relationship is ended. Apart from this, the copy of trading agreement and other document either photocopy or cancelled original copy will be kept for next five years after the full closure of the account. However, preservation and maintenance of the documents will be in a soft copy form. Page 14

15 (iv) The identification of records and transaction data will be made available to the competent authorities. Review of this Manual This manual will be reviewed at yearly intervals or as and when considered necessary by the Board of Directors. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Page 15