ANTI-MONEY LAUNDERING (AML) POLICY

General Definitions

For the purpose of this Manual, unless the context shall prescribe otherwise:

“AMLTF” means anti-money laundering and countering the financing of terrorism.

“Beneficial Owner” means a natural person or persons who ultimately owns or controls a Client or the natural person on whose behalf a transaction is being conducted and includes those persons who exercise ultimate effective control over a legal person or arrangement.

“Business Relationship” means the arrangement between a person and the Company whose primary purpose is to facilitate an occasional or regular course of business dealings between them.

“Client” in relation to a transaction or an account, includes:

  1. ) the person in whose name a transaction or account is arranged, opened or undertaken,
  2. ) a signatory to a transaction or account,
  3. ) any person to whom a transaction has been assigned or transferred,
  4. ) any person who is authorised to conduct a transaction, or
  5. ) such other person as may be prescribed by regulations.

“Company” means Zeal Capital Market (Seychelles) Limited which is incorporated in Seychelles with registration number, 8422618-1 and security dealer license, SD027 and its entities.

“CRO” means Compliance and Reporting Officer.

“FIU” means the Financial Invetigation Unit of Seychelles.

“Internal Auditor” means the internal auditor employed by the Company.

“Law” means Seychelles’ Anti-Money Laundering and Countering the Financing of Terrorism Act, 2020 (Act 5 of 2020).

“Manual” means the company's Risk Management & Procedures Manual.

“ML” means the money laundering offences defined in Section 3 of the Law.

“MLTF” means the money laundering and terrorist financing offence defined in Part II of the Law.

“STR” means suspicious transaction report which has the same meaning as defined by the Law.

“Tipping off” means the offence defined in Section 50 of the Law.

Introduction

The purpose of the Manual is to lay down the Company's internal practice, measures, procedures and controls relevant to the prevention of MLTF. The Manual is developed and periodically updated by the CRO based on the general principles set up by the Company’s Board of Directors (hereinafter the “Board”) in relation to the prevention of MLTF. All amendments and/or changes to the Manual must be approved by the Board. The Manual shall be communicated by the CRO to all the employees of the Company that manage, monitor or control in any way the Client's transactions and have the responsibility for the application of the practices, measures, procedures and controls that have been determined herein. The Manual has been prepared to comply with the provisions of the Law.

Manual Applicability

  1. The Manual applies to:
    1. ) All types of services offered to the Company’s Clients as well as the relevant company dealings with its Clients, including but not limited to foreign exchange trading transactions, which either do not aim to physically deliver the agreed foreign currency or are not materially settled in cash, irrespective of the Client account size and frequency of trading.
    2. ) Any other arrangement between the Company with another party including its employee, associated person and service provider.
  2. In this respect, CRO shall be responsible to update the Manual so as to comply with the Law's future requirements, as applicable, and regarding due diligence procedures being applied for Clients who deal in but not limited to foreign exchange trading transactions with the Company.

Responsibilities of the Board of Directors

The responsibilities of the Board in relation to the prevention of MLTF include the following:

  1. To determine, record and approve the general policy principles of company in relation to the prevention of MLTF and communicate them to the CRO.
  2. To appoint a CRO with overall responsibility for AMLTF
  3. To approve the Manual.
  4. To ensure that all relevant requirements of the Law are applied, and assure that appropriate, effective and sufficient systems and controls are introduced for achieving the abovementioned requirement.
  5. To ensure that the CRO and his assistants, if any, and any other person who has been assigned with the duty of implementing the procedures for the prevention of MLTF (i.e. personnel of the administration/back-office department), have complete and timely access to all data and information concerning Client’s identity, transactions' documents (as and where applicable) and other relevant files and information, so as to be fully facilitated in the effective execution of their duties, as included herein.
  6. To establish a clear and quick reporting chain based on which information regarding suspicious transactions is passed without delay to the CRO, either directly or through his assistants, if any, and notifies accordingly the CRO for its explicit prescription in the Manual.
  7. To ensure that the CRO and the Head of administration/back-office department have sufficient resources, including competent staff and technological equipment, for the effective discharge of their duties.

Responsibilities of the Compliance and Reporting Officer

The CRO shall belong hierarchically to the higher ranks of the Company’s organization structure to command the necessary authority. Furthermore, the CRO shall lead the Company’s AMLTF compliance procedures and processes and report to the senior management. The CRO shall also have access to all relevant information necessary to perform his duties. During the execution of his duties and the control of the compliance of the Company with the Law, the CRO shall obtain and utilise data, information and reports issued by international organisations.

The duties of the CRO shall include the following:

  1. establishing and maintaining a manual of compliance procedures,
  2. establishing an audit function to test AMLFT procedures and systems to promote efficiency and improvement,
  3. taking overall responsibility for all STRs, where a potentially suspicious transaction or service has been identified by the Company, the CRO must examine the relevant records to confirm whether there are reasonable grounds to suspect that the service or transaction may be related, directly or indirectly, to the commission of serious criminal conduct. This is the threshold for triggering the core STR obligation under s48 of the Law,
  4. ensuring that all officers, employees, and agents:
    1. ) are screened by the CRO and other appropriate officers before recruitment,
    2. ) are trained to recognise suspicious transactions and trends and particular risks associated with money laundering and financing of terrorism, and
    3. ) comply with all relevant obligations under Laws and the internal compliance manual,
  5. submitting compliance reports to the relevant authorities, and
  6. maintaining records keeping.

The constant monitoring of the Clients' accounts and transactions is an imperative element in the effective controlling of the risk of MLTF. In this respect, the CRO shall be responsible for maintaining as well as developing the on-going monitoring process of the Company.

Responsibilities of the Internal Auditors

The following obligations of the Internal Auditor are addressed specifically for the prevention of MLTF:

  1. The Internal Auditor shall review and evaluate, at least on an annual basis, the appropriateness, effectiveness and adequacy of the policy, practices, measures, procedures and control mechanisms applied for the prevention of MLTF mentioned in the Manual.
  2. The findings and observations of the Internal Auditor, in relation to point (1) above, shall be submitted, in a written report form, to the Board.

Customer Due Diligence (CDD) Workflow Risk-Based Approach (RBA)

The RBA mean that the Company will identify, assess and understand the MLTF risks to which they are exposed and take AMLFT measures commensurate with those risks in order to manage and mitigate them effectively.

Under the RBA, the Company will seek to identify, assess and understand its MLTF risks in relation to:

  1. its Clients,
  2. the countries or jurisdictions its Clients are from or in,
  3. the countries or jurisdictions the institution has operations in, and
  4. the products, services, transactions and delivery channels of the institution.

CDD, as defined in the Law, has four key components:

  1. identifying Clients, including any person acting on behalf of a non-individual Client, and verifying their identity,
  2. where the Client is not the beneficial owner, identifying the beneficial owner and taking reasonable measures to verify the beneficial owner’s identity,
  3. obtaining enough information about the nature of the business relationship and the Client or beneficial owner’s business to identify complex or unusual transactions or patterns of transactions and other high-risk activity, and
  4. taking reasonable measures to ascertain the purpose of one-off transactions (defined in S49(2) of the Law as transactions outside an existing business relationship that exceed SCR50,000, whether in a single or several linked operations), and the origin and ultimate destination of all fund’s transfers.

The adopted risk-based approach that is followed by the Company, and described in the Manual, has the following general characteristics:

  1. Recognises that the MLTF threat varies across Clients, countries, services and financial instruments.
  2. Allows the Board to differentiate between Clients of the Company in a way that matches the risk of their particular business.
  3. Allows the Board to apply its own approach in the formulation of policies, procedures and controls in response to the Company's particular circumstances and characteristics.
  4. Helps to produce a more cost-effective system.
  5. Identifying and assessing the MLTF risks emanating from particular Clients or types of Clients, financial instruments, services, and geographical areas of operation of its Clients.
  6. Managing and mitigating the assessed risks by the application of appropriate and effective measures, procedures and controls.
  7. Continuous monitoring and improvements in the effective operation of the policies, procedures and controls.

Ongoing Monitoring

Ongoing monitoring has two key components:

  1. Scrutinising transactions for consistency with the Client’s business, risk profile, and source of funds/wealth; and
  2. Keeping all CDD information and documentation up to date.

Sanctioned and High Risk Jurisdictions

The Company will refer to UN, EU, FATF and US name and country lists when determining the risk level of its counterparts.

Client Identification Procedures

The CRO shall ensure that the appropriate documents and information with respect to the following cases shall be duly obtained, as applicable and appropriate:

  1. All identification and verification procedures, including both internal and external communications, should be documented in writing and preserved as records under the Law.
  2. The Company should first establish to its satisfaction that it is dealing with a real person (natural or legal) and that any person purporting to act on behalf of a non-individual Client is properly authorised to act.
  3. The Company should take the necessary steps to identify the beneficial owner or owners of the assets which form the basis of the proposed relationship or transaction, and make appropriate inquiries into the purpose and nature of that relationship or transaction.
  4. Documents issued by reputable government sources (e.g. identity cards and passports) should be required. Where practicable, copies of the supporting evidence should be retained. Alternatively, reference numbers and other relevant details should be fully recorded.
  5. Where the Company is not able to identify and verify the identity of the prospective Client and all relevant beneficial owners in accordance with the Law, the Company should:
    1. ) not establish (or terminate) any business relationship,
    2. ) decline to carry out any transaction, and
    3. ) make an immediate STR to the FIU.

Reliance on Third Persons for Client Identification and Due Diligence Purposes

Company may rely on third persons for the implementation of client identification and due diligence procedures, provided that:

  1. The third person makes immediately available all data and information, which must be certified true copies of the originals, which were collected in the course of applying client identification and due diligence procedures.
  2. The Company applies the appropriate due diligence measures on the third person with respect to his professional registration and procedures and measures applied from the third person for the prevention of MLTF. The CRO shall be responsible for the implementation of the provisions mentioned above.

Tipping Off

In adherence to the aforementioned policies and procedures, the Company refrains from conducting the due diligence process if there is reasonable suspicion that such action may alert the Client. The Company will proceed to file a STR as required by the Law.

Suspicious Transactions

The definition of a suspicious transaction as well as the types of suspicious transactions which may be used for MLTF are almost unlimited. A suspicious transaction will often be one which is inconsistent with a Client's known, legitimate business or personal activities or with the normal business of the specific account, or in general with the economic profile that the company has created for the Client.

The Company shall ensure that it maintains adequate information and knows enough about its Clients’ activities in order to recognise on time that a transaction or a series of transactions is unusual or suspicious. In order to identify suspicious transactions the CRO shall perform the following activities:

  1. Monitor on a continuous basis any changes in the Client's financial status, business activities, and/or type of transactions.
  2. Monitor on a continuous basis if any Client is engaged in any of the practices described in the list below of what might constitute suspicious transactions/activities related to MLTF.
  3. Where a potentially suspicious transaction or service has been identified by the Company, the CRO must examine the relevant records to confirm whether there are reasonable grounds to suspect that the service or transaction may be related, directly or indirectly, to the commission of MLTF or other serious criminal conduct.
  4. If after completing this review, the CRO decides that reasonable grounds for suspicion exist, then he/she must immediately proceed to make an STR to the FIU. All STRs must be made within two working days of forming the relevant suspicion (or knowledge).

Record-Keeping Procedures

The administration/back-office department of the Company shall maintain records of:

  1. The nature of the evidence of identity obtained on any Client.
  1. All transactions and related correspondence carried out by the C
  1. Records of all AMLFT enquiries received from the FIU and all reports made to the FIU under S27 of the Law.
  1. All documents collected and reports made during both Client onboarding and on-going monitoring.
  1. Documents obtained and reports created during the CDD process.

All records must be kept for a minimum period of seven (7) years from the date of the relevant event or, in the case of an ongoing business relationship, after the business relationship ceases, in a form which is immediately accessible upon request.

Format of Records

The administration/back-office department shall retain the documents/data mentioned above, other than the original documents or their certified true copies that are kept in a hard copy form, in other forms, such as electronic form, provided that the administration/back-office department shall be able to retrieve the relevant documents/data without undue delay and present them at any time, to regulatory bodies, after a relevant request. The Company has established a documents/data retention policy and ensuring the said policy takes into consideration the requirements of the Law.

The documents/data obtained, shall be in their original form or in a certified true copy form. In the case that the documents/data are certified as true by a different person than the company itself or by the third person mentioned in Reliance on Third Persons for Client Identification and Due Diligence Purposes, the documents/data must be notarised.

A true translation shall be attached in the case that the abovementioned documents are in a language other than English. Each time the company shall proceed with the acceptance of a new Client, the Head administration/back-office department shall be responsible for ensuring compliance with the provisions of this section.

Employees' Obligations

Every employee of the Company has the obligation to understand:

  1. The Company’s and their own personal statutory obligations and the possible consequences for failure to comply with CDD and record-keeping requirements under the Law.
  2. All other applicable laws and regulations, and the possible consequences of breaches of these obligations.
  3. The Company’s policies and procedures relating to AMLFT, including suspicious transaction identification and reporting.
  4. Any new and emerging techniques, methods and trends in MLTF to the extent that such information is needed by the employee to carry out their particular roles in the Company with respect to AMLFT.

Training and Communication Policy

  1. The CRO shall ensure that the employees are fully aware of their legal obligations according to the Law, by introducing a complete employees' education and training program.
  2. All employees shall receive training or refresher session annually, or whenever there are amendments to the Company’s policies, regulatory requirements, or changes in employee duties. The timing and content of the training provided to the employees of the various departments will be determined according to the needs of the C
  3. The training program aims at educating the Company's employees on the latest developments in the prevention of MLTF, including the practical methods and trends used for this purpose.
  4. All employees shall affirm on this AML Policy to demonstrate their commitment to AMLTF.
  5. Clients or any other third party are informed, and required to acknowledge and accept this AML Policy which is posted on the Company’s Website.

Monitoring & Improvement

  1. CRO is responsible for monitoring the effectiveness of this AML Policy and will review the implementation of it on a regular basis as per the internal policies.
  2. Any need for improvements will be applied as soon as possible. Employees are encouraged to offer their feedback on this policy to the CRO.
  3. This AML Policy does not form part of an employee contract of employment and the Company may amend it at any time so to improve its effectiveness at combatting corruption.