Anti-Money Laundering FAQs

FAQs on Anti Money Laundering (AML)

What is Money Laundering?

Money laundering is the act of taking illegal money ("dirty" money) & putting it through a cycle of transactions that “washes” the funds & “cleans” them, making the money look like proceeds from legal activities.

Who is a Money Launderer?

A money launderer is a person or a group that either has possession of the proceeds of a crime or of the assets that represent the proceeds of illegal activities such as fraud, theft, drug trafficking, or any other crimes

Regulatory Regime

The Prevention of Money Laundering Act, 2002 (PMLA) has come into effect from 1st July 2005 in India.

To Whom it is Applicable

The Act covers Banking Companies, Financial Institutions & Market Intermediaries i.e. Stock-Broker, Sub-Broker, Share Transfer Agent, Depository Participants, Portfolio Manager, Investment Adviser etc. registered under Section 12 of the SEBI Act. W.e.f. November 25, 2009, the PMLA Guidelines has also been adopted by FMC (for Commodities segment)

Who is a Principal Officer?

Every banking company, financial institution & Intermediary has to designate a “Principal Officer”& has to communicate the details of the Principal Officer (name, designation & address) to the Office of the Director-FIU-New Delhi. Principal Officer is responsible for ensuring compliance relating to PMLA.

Stages in Money Laundering Cycle

Placement: Where the dirty money is placed into the financial institutions or retail economy through Bank Deposits etc.

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Layering: Means separating the illegally obtained money from its source through a series of financial transactions that makes it difficult to trace the origin i.e. several bank-to-bank transfers, wire transfers between different accounts in different names in different countries, changing the money's currency etc.

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Integration: Means converting the illicit funds into actually legal form i.e. by Purchase of high value goods/property, purchasing businesses, automobiles & other assets. (Picture below showing different stages in Money Laundering)

Prescribe Value & Nature of Transactions for Which Records Need to be Maintained

All cash transactions of the value of more than Rs 10 lacs or its equivalent in foreign currency

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All series of cash transactions integrally connected to each other which have been valued below Rs 10 lacs or its equivalent in foreign currency where such series of transactions take place within one calendar month.

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All suspicious transactions whether or not made in cash

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Transactions remotely connected or related should also be considered.

What is a Suspicious Transactions?

Suspicious transaction means a transaction whether or not made in cash which, to a person acting in good faith –

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gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or

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appears to be made in circumstances of unusual or unjustified complexity; or

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appears to have no economic grounds or bonafide purpose.

Illustrative List of Suspicious Transaction in Broking Industry are as follows

Client Identity/Background
• False / incorrect identification documents
• Client not present for registration personally
• Suspicious background or links with known criminals

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Multiple Accounts / Activity in Account
• Large number of accounts having a common account holder
• Unexplained transfers between multiple accounts with no rationale
• Unusual activity compared to past transactions
• Doubt over the real beneficiary of the account

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Particulars of Transactions
• Pay-Out/Pay-In of funds & securities transferred to /from a third party
• Off market transactions especially in illiquid stock & in F & O at unrealistic prices
• Large sums being transferred from overseas for making payments
• Inconsistent with the clients’ financial background

Key Features of PMLA

Client Due Diligence which include policy for acceptance & identification of clients

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Record keeping procedures including retention thereof.

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Monitoring of transactions

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Suspicious transactions monitoring & reporting.

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Appointment of Principal Officer.

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Continuous review of procedures & systems.

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Ongoing training & up gradation of skill set.

ATTENTION INVESTORS:

• Precautions for clients dealing in options • || • Investor Charter : Annexure A – Stock Broker | Annexure A – Research Analyst (RA) | Annexure A – DP | Annexure B - DP • || • Advisory for KYC updation • || • Advisory for Investors • || • Investor Awareness regarding the revised guidelines on Margin Collection • || • Link your Aadhar number with us here. • || • IPO Subscription: " UPI Mechanism is Compulsory for Retail Investors. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account." • || • Prevent Unauthorized Transactions in your Demat Account remains in investor's account." • || • Prevent Unauthorized Transactions in your Demat Account- Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile number for all debit and other important transactions in your demat account directly from CDSL on the same day. “ISSUED IN THE INTEREST OF INVESTORS” "Prevent unauthorised transactions in your account --> Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the end of the day . Issued in the interest of Investors."

Registered Office : Sushil Financial Services Private Limited., 12, Homji Street Fort Mumbai-400 001 • Tel. No. +91-22-40936000 • Fax No. +91-22-22665758 • Email: info@sushilfinance.com

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. Receive alerts on your Registered Mobile number for all debit and other important transactions in your demat account directly from CDSL on the same day. Prevent unauthorised transactions in your account Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the end of the day.

Sushil Financial Services Private Limited - CIN No. U67120MH1991PTC063438- Member : BSE/ NSE. SEBI Registration No. - INZ000165135.. Depository Participant (CDSL) SEBI Registration No.- IN-DP-504-2020. Research Analyst SEBI Registration No.- INH000000867. BSE Enlistment no for RA : 5051. IPO Distributor. AMFI Registered Mutual Fund Distributor ARN No. 77875 Registered Since : 04-Jan-2010 Valid till : 03-Jan-2027

Compliance Officer Details: Name: Mr. Suresh Nemani, Email id: suresh.nemani@sushilfinance.com, Contact No: 022-40935000. In case of any grievances, please write to us on compliance@sushilfinance.com

Disclaimer :
For Research Analyst: Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Investments in securities market are subject to market risk, read all the related documents carefully before investing.

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