• To prevent, combat and control money laundering.
• To confiscate and seize the property obtained from the laundered money.
• To deal with any other issue connected with money laundering in India.

• To protect the Company from being used for money laundering
• To follow thorough “Know Your Customer” (KYC) policies and procedures in the day-to-day business.
• To take appropriate action, once suspicious activities is detected, and make report to designated authorities in accordance with applicable law / laid down procedures.
• To comply with applicable laws as well as norms adopted internationally with reference to Money Laundering.

• Placement - This is where the criminal proceeds are first-injected into the system. It is also the stage where those who are educated, briefed and alert to the process of money laundering, have the best chance of detecting what is happening and are thus best able to thwart and disrupt the process at the outset.
  At this stage, very often larger amounts of money are divided and distributed into smaller amounts to avoid suspicion and then paid into a series of bank accounts, arose to purchase securities, or life policies or other assets, sometimes many kinds of assets, all to achieve the prime purpose of being able to inject the tainted money or value into the legitimate mainstream financial/business system.
  Eg: A criminal having huge crime proceeds in form of cash, can deposit this cash in bank accounts maintained with difference banks, in the name of his relatives, friends and associates, in small amounts.
• Layering - After the injection has taken place and the tainted money or value has entered and become mixed up in the main mass of money or value in the financial system, it is spun around different accounts, different names, different ownerships, plus different instruments and investments.
  All these movements are designed to disguise the origins of the money or value and thus confuse those who might be attempting to trace the money or value back to the root, criminal source.
  Facilitated by the birth of electronic funds transfer technology the fast movement of funds through multiple jurisdictions often with different laws, creates major problems for investigators of identification, access and ultimately achieving successful prosecutions.
• Integration - Placing the laundered proceeds back into the economy in such a way that they re-enter the financial system as apparently legitimate funds.
  Integration means the reinvestment of those funds in an apparently legitimate business so that no suspicion of its origin remains and to give the appearance of legitimizing the proceeds.
  
  • Section 3 of the Prevention of Money Laundering Act, 2002 defines the offences or laundering. In terms, of this section whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of an offence of money laundering.
  • The term proceeds of crime have been defined under Section 2(u)of the Act viz: “Any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property.” The said section broadly states that if a person is involved in the process of projecting proceeds of crime as untainted property then he shall be guilty of money laundering, for indulging in the said process of the following three elements / activities shall play a very important role:
    Possession or ownership of the proceeds of crime or property acquired from proceeds of crime, which is being reflected as untainted property. Transactions relating to proceeds of crime like converting its form
  • Concealment of the original transaction and/or creating ghost transactions from concealing actual transactions.
    E.g. Possessing Benami Property, Unexplained cash credits, unexplained expenditure, bogus or fictitious accounts, unexplained investments.

• Maintain a record of all transactions, the nature and value of which may be prescribed, whether such transactions comprise of single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month;
• Furnish information of transactions referred to in Clause (a) to the Director within such time as may be prescribed;
• Verify and maintain the records of the identity of all its Clients, in such a manner as may be prescribed
  As per provision of section 2(n) of the Act, term “Intermediary” means: “ 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 (15 of 1992);

• All cash transactions of the value of more than rupees ten lakhs or its equivalent in foreign currency;
• All series of cash transactions integrally connected to each other which have been valued below rupees ten lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month;
• All cash transaction where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place;
• All suspicious transactions whether or not image in cash;
• Identity and current address or addresses including permanent address or addresses of the Client, the nature of business of the Client and his financial status; Provided that where it is not possible to verify the identity of the Client at the time of opening an account or executing any transaction, the banking company, financial institution and intermediary, as the case may be, shall verify the identity of the Client within a reasonable time after the account has been opened or the transaction has been executed. Under these circumstances the Act, applies to Tradewell Securities Ltd.

Suspicious transactions involve funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under the law; The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction

It is difficult to define exactly what constitutes suspicious transactions and as such given below is a list of circumstances where transactions may be considered to be suspicious in nature. This list is only inclusive and not exhaustive. Whether a particular transaction is actually suspicious or not will depend on the background, details of the transactions and other facts and circumstances.

• Complex /unusually large transactions/ patterns which appear to have no economic purpose.
• Client having suspicious background or links with known criminals
• Clients whose identity verification seems difficult.
  For Example:
  • False identification documents
  • Identification documents which could not be verified within reasonable time
  • Doubt over the real beneficiary of the account
  • Accounts opened with names very close to other established business entities.
• Client appears not to co-operate.
• Use of different accounts by Client alternatively.
• Sudden activity in dormant accounts
• Multiple accounts
  
  • Large number of account having a common account holder, authorized signatory with no rationale
  • Unexplained transfers between multiple accounts with no rationale
• Asset management services for clients where the sources of funds is not clear or not in keeping with the clients’ apparent standing/business activity
• Substantial increase in business without apparent cause (Unusual activity compared to past transactions)
• Activity materially inconsistent with what would be expected from declared business
• Inconsistency with clients apparent financial standing
• Any account used for circular trading
• A transaction which gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime.
• A transaction which appears to be a case of insider trading
• Transactions reflect likely market manipulations
• Suspicious off market transactions
• Value of transaction just under the reporting threshold amount in an apparent attempt to avoid reporting
• Inconsistency in the payment pattern by the client
• Trading activity in account of high risk clients based on their profile, business pattern and industry segment
• Accounts based as ‘passed through’. Where no transfer of ownership of securities or trading is occurred in the account and the account is being used only for funds transfers / layering purposes.
• Large deals at prices away from the market
• Suspicious off market transactions
• Purchases made in one client’s account and later on transferred to a third party through off market transactions through DP Accounts;
• Multiple transactions of value just below the threshold limit specified in PMLA so as to avoid possible reporting;

We are following KYC norms before enlisting clients. We are also ensuring that all trades are settled through the banking channels and that all shares are electronically transferred to the beneficial owner through settlement systems of the exchanges. However, in order to ensure monitoring of large transactions, a report on all the Clients whose trade turnovers in Cash Market Segment are above Rs.10 lakh per month are reported on monthly basis by Compliance Department to the Principal Officer of the Company. The Compliance department would examine the patterns to determine whether there is a prima facie evidence of money laundering activity and ask concerned departments to call for any information that may be deemed necessary. The back office would provide the data to the Compliance department on monthly basis by 1st of the following month. The Compliance Department of the Company will prepare the report on the same and submit to the Principal Officer of the Company under PMLA, 2002.

Depository activity involves transfer of shares and shares have monetary value, As such, depository activity has been brought within the purview of the PMLA Policy. We follow KYC norms for opening accounts with our depository. We are also ensuring that all trades are settled through the banking channels and that all shares are electronically transferred to the beneficial owner through settlement systems of the exchanges In certain cases, the shares are transferred from one account to another by way of Physical Delivery Instruction Slips. However, in order to monitor transactions in dormant accounts, alerts would be generated and immediately reported to the Risk Management and the Compliance Department Depository department is already having a separate PMLA policy with regard to their operations, which will also be applicable to them in addition to this policy. But this policy will supersede with the policy of Depository.