POLICY AND GUIDELINES ON ANTI-MONEY LAUNDERING (AML) FOR RGX RESEARCH PRIVATE LIMITED (INH000021094)
ABOUT RGX RESEARCH PRIVATE LIMITED
RGX RESEARCH PRIVATE LIMITED is a SEBI registered Research Analyst vide registration number INH000021094.
INTRODUCTION
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, Government of
India.
Under the recommendation made by the Financial Action Task Force on
Anti Money Laundering standards, SEBI had issued the guidelines on Anti
Money Laundering standards vide their notification no. SEBI/HO/MIRSD/
DOS3/CIR/P/2018/104 dated July 04, 2018, ISD/CIR/RR/AML/1/6 dated
18th January 2006, and vide letter no. ISD/CIR/RR/AML/2/6 dated 20th
March 2006 had issued the obligation on Intermediaries registered under
section 12 of the Securities and Exchange Board of India Act, 1992 (The
Act). As per the SEBI guidelines, all Intermediaries have been advised to
ensure that proper policy frameworks are put in place as per the guidelines
on Anti Money Laundering standards notified by SEBI.
RGX RESEARCH PRIVATE LIMITED has formulated 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. Money Laundering can be defined as
engaging in financial transactions that involve income derived from criminal
activity, transactions designed to conceal the true origin of criminally
derived proceeds and appears to have been received through legitimate
sources/origins.
These policies and procedures apply to all RGX RESEARCH PRIVATE
LIMITED employees, affiliates & all its subsidiaries as per the statutory
provisions and are to be read in conjunction with the existing guidelines.
The following procedures have been established to ensure that all employees
know the identity of their customers and take appropriate steps to combat
money laundering incidents.
APPLICABILITY
These policies and procedures apply to all RGX RESEARCH PRIVATE
LIMITED employees, affiliates & all its subsidiaries as per the statutory
provisions and are to be read in conjunction with the existing guidelines.
The following procedures have been established to ensure that all employees
know the identity of their customers and take appropriate steps to combat
money laundering incidents
OBJECTIVE
The objective of this policy framework is to-
Create awareness and provide clarity on KYC standards and AML
measures
To have a proper Customer Due Diligence (CDD) process before
registering clients
To monitor and maintain records of all cash transactions of the value
of more than INR 10 lac
To maintain records of all series of integrally connected cash
transactions within one calendar month.
To monitor and report suspicious transactions
To discourage and identify money laundering or terrorist financing
activities
To take adequate and appropriate measures to follow the spirit of the
PMLA
PRINCIPAL OFFICER
The Company has designated Mr. Ritesh G Gokani as Principal Officer. He
is responsible for overseeing the implementation of this Policy. Employees
shall refer all matters concerning the issues covered by this Policy to the
Principal Officer and shall act in accordance with her/his instructions on this
behalf.
All submissions required to be made by Employees in terms of this Policy
shall be addressed to the Principal Officer. The Principal Officer shall be
responsible for maintaining and updating all records to be kept by RGX
RESEARCH PRIVATE LIMITED in accordance with this Policy or any
applicable laws/regulations.
POLICY AND PROCEDURES TO COMBAT MONEY LAUNDERING AND TERRORIST FINANCING
RGX RESEARCH PRIVATE LIMITED has resolved that it would, as an
internal policy, take adequate measures to prevent money laundering and
shall put in place a framework for identifying, monitoring, and reporting
suspected money laundering or terrorist financing transactions to FIU as per
the guidelines of PMLA Rules, 2002. Further, RGX RESEARCH
PRIVATE LIMITED shall regularly review the policies and procedures on
PMLA and Terrorist Financing to ensure their effectiveness.
IMPLEMENTATION OF THE POLICY
The Principal Officer to ensure overall compliance with the obligations
imposed under the PML Act and the Rules. The Principal Officer will
ensure the filing of necessary reports with the Financial Intelligence Unit
(FIU –IND). The Principal Officer/Designated Partner would act as a central
reference point in facilitating onward reporting of suspicious transactions
and playing an active role in the identification and assessment of potentially
suspicious transactions.
The LLP is designating Ms. Abhilasha Garg, Designated Partner as
Designating Partner by the reporting entity to ensure overall compliance
with the obligations imposed under the PML Act and the PML Rules.
ASPECTS OF THE POLICY
Obtaining sufficient information about the client in order to identify who
is the actual beneficial owner of the securities or on whose behalf the
transaction is conducted. The beneficial owner is the natural person or
persons on whose behalf a transaction is being conducted. It also
incorporates those persons who exercise ultimate effective control over a
legal person or arrangement.
Verify the customer’s identity using reliable, independent source
documents, data, or information.
Conduct ongoing due diligence and scrutiny of the account/client to ensure
that the transaction conducted are consistent with the client’s
background/financial status, its activities, and risk profile.
The Customer Due Diligence Process includes three specific parameters:
LLP will accept clients whom we are able verify their identity as per the
government guidelines. Either the client should visit the office/branch or
concerned official may visit the client at his residence /office to get the
necessary documents filled in and signed. We may also use approved online
modes/methods/Standard practices etc. to verify the identity and documents
of the prospective clients.
In case of accounts are opened in the name of NRI. (If the LLP cannot
personally verify the NRI Client), the LLP / KYC team shall ensure the
photocopies of all the KYC documents/ Proofs and PAN Card are attested
by Indian Embassy or Consulate General in the country where the NRI
resides or as per the prevailing guidelines for the same. The photocopies of
the KYC documents and PAN Card should be sign by NRI. If the NRI
comes in person to open the account, the above attestation is required may
Detailed search to be carried out to find that the Client is not in defaulters /
negative list of regulators. RGX RESEARCH PRIVATE LIMITED obtain
completes information from the client. It should be ensured that the initial
forms taken by the clients are filled in completely. All photocopies
submitted by the client are checked against original documents without any
exception. Ensure that the ‘Know Your Client’ guidelines are followed
without any exception. All supporting documents as specified by Securities
and Exchange Board of India (SEBI) and Exchanges are obtained and
verified.
LLP will not accept clients with identity matching persons known to have
criminal background. We will check whether the client’s identify matches
with any person having known criminal background or is not banned in any
other manner, whether in terms of criminal or civil proceedings by any
enforcement/regulatory agency worldwide.
KYC team shall check following sites (not exhaustive) before admitting any
person as client-
Data available on SEBI and other relevant enforcement sites
Any other database available at the prevailing time
CLIENTS OF SPECIAL CATEGORY
LLP are very careful when accepting clients of special categories like
Non-Resident clients
High net-worth clients (clients having an annual income of INR 25
Lac or more or having a Net worth of Rs.10 Crore or more)
Trust, Charities, Non-Governmental Organizations (NGOs), and
Companies having close family shareholdings or beneficial
ownership
Politically Exposed Persons (PEP). 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, applied to the accounts of the family
members or close relatives of PEPs
Companies offering foreign exchange
Clients in high-risk countries (As per the latest data provided by the
government ) where the existence/effectiveness of money laundering
controls is suspect, where there is unusual banking secrecy, countries
active in narcotics production, Countries where corruption (as per
Transparency International Corruption Perception Index) is highly
prevalent, Countries against which government sanctions are
applied, Countries reputed to be any of the following –Sponsors of
international terrorism, Offshore financial centers, Tax havens,
Countries where fraud is highly prevalent.
Clients with dubious reputation as per public information available
etc.
Persons of foreign origin, companies having closed
shareholding/ownership companies dealing in foreign currency, shell
companies, overseas entities, clients in high-risk countries
GUIDELINES ON IDENTIFICATION OF BENEFICIAL OWNERSHIP
For non-individual customers as part of the due diligence measures
sufficient information must be obtained in order to identify persons who
beneficially own or control securities account. Whenever it is apparent that
the securities acquired or maintained through an account are beneficially
owned by a party other than the client, that party should be identified and
verified using client identification and verification procedures as early as
possible. The beneficial owner is the natural person or persons who
ultimately own, control, or influence a client and/or persons on whose
behalf a transaction(s) is/are being conducted. It includes persons who
exercise ultimate effective control over a legal person or arrangement.
Do not accept client registration forms that are suspected to be fictitious.
Ensure that no account is being opened in a fictitious / Benami or on an
anonymous basis
Do not compromise on submission of mandatory information/ documents.
The client’s account should be opened only on receipt of mandatory
information along with authentic supporting documents as per the regulatory
guidelines. Do not open the accounts where the client refuses to provide
information/documents and we should have sufficient reason to reject the
client towards this reluctance.
CUSTOMER IDENTIFICATION PROCEDURE
To have a mechanism in place to establish the identity of the client along
with firm proof of address to prevent the opening of any account which is
fictitious / benami / anonymous in nature.
Documents that can be relied upon:
PAN Card: PAN card is mandatory and is the most reliable document as only one card is issued to an individual and we can independently check its genuineness through the IT website.
ADDRESS Proof: For valid address proof we can rely on a Voter’s Identity Card, Passport, Bank Statement, Aadhaar Letter, Ration card, and latest Electricity/telephone bill in the name of the client.
Documents to be obtained as part of the customer identification procedure for new clients:
*List is for illustration purpose. Actual need of documents will be dependent on the prevailing guidelines.
Types of entity
Documentary requirements
Corporate
a. Copy of the balance sheets for the last 2 financial years (to be submitted every year).
b. Copy of latest share holding pattern including list of all those holding control, either directly or indirectly, in the company in terms of SEBI takeover Regulations, duly certified by the company secretary/Whole time director/MD (to be submitted every year).
c. Photograph, POI, POA, PAN and DIN numbers of whole time directors/two directors in charge of day-to-day operations.
d. Photograph, POI, POA, PAN of individual promoters holding control - either directly or indirectly.
e. Copies of the Memorandum and Articles of Association and certificate of incorporation.
f. Copy of the Board Resolution for investment in securities/commodities market. Authorised signatories list with specimen signatures.
Partnership firm
a. Copy of the balance sheets for the last 2 financial years (to be submitted every year).
b. Certificate of registration (for registered partnership firms only).
c. Copy of partnership deed.
d. Authorised signatories list with specimen signatures.
e. Photograph, POI, POA, PAN of Partners.
Trust
a. Copy of the balance sheets for the last 2 financial years (to be submitted every year).
b. Certificate of registration (for registered trust only).
c. Copy of Trust deed.
d. List of trustees certified by managing trustees/CA. Authorised signatories list with specimen signatures.
HUF
· PAN of HUF.
· Deed of declaration of HUF/List of coparceners.
· Bank pass-book/bank statement in the name of HUF.
Photograph, POI, POA, PAN of Karta.
Unincorporated Association or a Body of Individuals
· Proof of Existence/Constitution document.
· Resolution of the managing body & Power of Attorney granted to transact business on its behalf.
· Authorized signatories list with specimen signatures.
Banks/Institutional Investors
· Copy of the constitution/registration or annual report/balance sheet for the last 2 financial years.
· Authorized signatories list with specimen signatures.
Foreign Institutional Investors
· Copy of SEBI registration certificate.
· Authorized signatories list with specimen signatures.
Army/Government Bodies
· Self-certification on letterhead.
· Authorized signatories list with specimen signatures.
Registered Society
· Copy of Registration Certificate under Societies Registration Act.
· List of Managing Committee members.
· Committee resolution for persons authorised to act as authorised signatories with specimen signatures.
· True copy of Society Rules and Bye Laws certified by the Chairman/Secretary.
NRI account - Repatriable/non-repatriable
· Copy of the PIS permission issued by the bank.
· Copy of the passport.
· Copy of PAN card.
· Proof of overseas address and Indian address.
· Copy of the bank statement.
· Copy of the demat statement.
MONEY LAUNDERING RISK ASSESSMENTS
Risk assessment on money laundering is dependent on the kind of customers
the LLP deals with. Typically, risks are increased if the money launderer
can hide behind corporate structures such as limited companies, offshore
trusts, special purpose vehicles, and nominee arrangements etc. The Risk
Assessment is required in order to assess and take effective measures to
mitigate its money laundering and terrorist financing risk with respect to
clients, countries or geographical areas, nature and volume of transactions,
payment methods used by clients, etc. The risk assessment shall also take
into account any country-specific information that is circulated by the
government of India and SEBI from time to time, as well as, the updated list
of individuals and entities who are subjected to sanction measures as
required under the various United Nations Security Resolutions as well as
various international organizations of repute
Risk classification
The level of Money Laundering risks that the LLP is exposed to by an
investor relationship depends on:
Type of the customer and nature of business
Type of product/service availed by the customer
Country where the Customer is domiciled
Based on the above criteria, the customers may be classified into three
Money laundering relationships depends on:
High Risk
Medium Risk
Low Risk
Risk Category
Indicative List of Clients
High Risk
1. Non-Resident Indian (NRI) clients.
2. Non-Resident clients (NRIs).
3. Trusts, Charities, NGOs, and organizations receiving donations.
4. Companies having close family shareholdings or Beneficial Ownership.
5. Current/Former Head of State.
6. Politically Exposed Persons (PEP) of Foreign Origin.
7. High-profile politicians of State, and connected persons (immediate family, close advisors, and companies in which such individuals have interest).
8. Companies having foreign exchange influence.
9. Clients in high-risk countries (where the subject/effective control is by any of the following - tax havens, national terrorism where fraud is highly prevalent).
10. Non-face-to-face clients.
11. Clients with dubious reputation as per public information available.
Medium Risk
Individual and non-individual clients falling under definition of Speculators, Day Traders and all clients trading in futures and options segment, in case of clients where there is continuous margin shortfall, regular instances of dishonored are categorized as medium risk clients of cheque.
Low Risk
Senior Citizens, Salaried Employees and a major portion of clients who indulge in delivery-based trading & clients who are not covered in the high & medium risk profile are Low-risk Profile client.
This list is indicative only, will be dependent on various other relevant factors at the time of evaluation. The risk profile also depends on the trading pattern, payment pattern, financial status, and background of the client. RGX RESEARCH PRIVATE LIMITED will put in place a system of periodical review of risk categorization of accounts and the need for applying enhanced due diligence measures in case of higher risk perception on a client High-Risk Clients, categorization should be carried out at least once in six months while for Medium and Low –Risk clients, categorization frequency should be once in a year.
The following safeguards are to be followed while accepting the clients:
The client account should not be opened in a fictitious / benami name
or on an anonymous basis.
Risk perception of the client needs to be defined having regard
Client's location (registered office address, correspondence addresses
and other addresses if applicable)
Nature of business activity, tracing turnover etc.
Manner of making payment for transactions undertaken
Documentation like KYC, Broker-client agreement and Risk Disclosure Document, and other information from different category
of clients prescribed by SEBI and any other regulatory authority to be
collected depending on perceived risk and having regard to the
requirement of the Prevention of Money Laundering Act, 2002,
guidelines issued by RBI and SEBI from time to time.
Ensure that a client account is not opened where the organization is
unable to apply appropriate client's due diligence measures / KYC
policies. This may be applicable in cases where it is not possible to
ascertain the identity of the client, information provided to the
organization is suspected to be non- genuine, perceived, or non-cooperation of the client in providing full and complete information.
Discontinue to do business with such a person and file a suspicious
activity report. We can also evaluate whether there is suspicious
trading in determining whether to freeze or close the account. Should
be cautious to ensure that it does not return securities or money that
may be from suspicious trades. However, we can consult the relevant
authorities in determining what action should be taken when it
suspects suspicious trading.
We need to comply with adequate formalities when the client is
permitted to act on behalf of another person/entity should be clearly
specified the manner in which the account should be operated,
transaction limits for the operation, additional authority required for
transactions exceeding a specified quantity/value other appropriate
detail. The rights and responsibilities of both the persons (i.e. the
agent-client registered with Broker, as well as the person on whose
behalf the agent is acting) should be clearly laid down.
Adequate verification of a person's authority to act on behalf of the
customer should be carried out.
Necessary checks and balance to be put in place before opening an
account so as to ensure that the identity of the client does not match
with any person having a known criminal background or is not banned in any other manner, whether in terms of criminal or civil proceedings
by any enforcement agency worldwide.
For new clients:
Each client may be met in person or through online verification as per
regulatory guidelines, before accepting the KYC. The client may be
met at the Registered Office or any of the branch offices as per mutual
convenience of the client and ourselves.
Verify the PAN details on the Income Tax website.
All documentary proofs given by the client should be verified with
original.
Documents like the latest Income Tax returns, annual accounts, etc.
should be obtained for ascertaining the financial status. If required,
obtain additional information/documents from the client to ascertain
his background and financial status.
Obtain complete information about the client and ensure that the KYC
documents are properly filled up, signed, and dated. Scrutinize the
forms received at the branch office thoroughly before forwarding it to
RO for account opening.
Ensure that the details mentioned in the KYC match with the
documentary proofs provided and with the general verification done
by us.
If the client does not provide the required information, then we should
not open the account of such clients.
As far as possible, a prospective client can be accepted only if
introduced by RGX RESEARCH PRIVATE LIMITED’s existing
client or associates or known entity etc.
In the case of walk-in clients, extra steps should be taken to ascertain
the financial and general background of the client
If the account is opened by a POA/Mandate Holder, then we need to
clearly ascertain the relationship of the POA/Mandate Holder with the client. Apply the KYC procedures to the POA/Mandate Holder also.
LLP should not open any accounts in a fictitious / benami /
anonymous basis
LLP should not open accounts where we are unable to apply
appropriate KYC procedures.
For existing clients::
Keep updating the financial status of the client by obtaining the latest
Income Tax Return, Net worth Certificate, Annual Accounts etc
Update the details of the client like address, contact number, Demat
details, bank details, etc. In case, at any given point of time, we are
not able to contact the client either at the address or on the phone
number, contact the introducer, and try to find out alternative contact
details.
Check whether the client’s identity matches with any person having
known criminal background or is not banned in any other manner,
whether in terms of criminal or civil proceedings by any local
enforcement / regulatory agency. For scrutiny / back ground check of
the clients/HNI, websites such as www.watchoutinvestors.com should
be referred. Also, Prosecution Database / List of Vanishing
Companies available on SEBI etc. and RBI Defaulters Database
available on www.cibil.com should be checked.
Scrutinize minutely the records/documents pertaining to clients of
special category (like Non-resident clients, High Net worth Clients,
Trusts, Charities, NGOs, Companies having close family
shareholding, Politically exposed persons, persons of foreign origin,
Current/Former Head of State, Current/Former senior high profile
politician, Companies offering foreign exchange offerings, etc.) or
clients from high-risk countries (like Libya, Pakistan, Afghanistan,
etc.) or clients belonging to countries where corruption /fraud is
highly prevalent.
Review the above details on a going basis to ensure that the
transactions being conducted are consistent with our knowledge of
customers, its business and risk profile, taking into account, where
necessary, the customer’s source of funds.
Mandate Holder Policy
The primary objective of this policy is to ensure that we are aware of
who is the ultimate beneficiary of the transaction and that the
transactions executed, through the mandate holder are bona fide.
It is possible that some of the individual clients might appoint a
mandate holder. Normally the trading account is opened in the name
of various family members and one of the family members will hold
the mandate. Also, in the case of some NRI clients who are based
abroad, there may be a POA/Mandate in favor of a person residing in
India.
Whenever any account is operated by a mandate holder, find out the
relationship of the mandate holder with the client, followed by
establishing the identity of the mandate holders by obtaining proof of
identity and address.
Do not accept any payment from the account of the mandate holder in
favor of the client. All the payments have to be received from the
client’s bank account only for which the POA holder may or may not
have the mandate to operate the bank account. Similarly, pay-out
cheques should be issued only in the name of the client and not in the
name of the mandate holder.
In case there is suspicion on the relationship between the mandate
holder and the actual client or in case the behavior of the mandate
holder is suspicious, do take necessary advice from the Business
Head.
Roles & Duties
The primary objective of this policy is to ensure that we are aware of
who is the ultimate beneficiary of the transaction and that the
transactions executed, through the mandate holder are bona fide.
It is possible that some of the individual clients might appoint a
mandate holder. Normally the trading account is opened in the name
of various family members and one of the family members will hold
the mandate. Also, in the case of some NRI clients who are based
abroad, there may be a POA/Mandate in favor of a person residing in
India.
Whenever any account is operated by a mandate holder, find out the
relationship of the mandate holder with the client, followed by
establishing the identity of the mandate holders by obtaining proof of
identity and address.
Do not accept any payment from the account of the mandate holder in
favor of the client. All the payments have to be received from the
client’s bank account only for which the POA holder may or may not
have the mandate to operate the bank account. Similarly, pay-out
cheques should be issued only in the name of the client and not in the
name of the mandate holder.
In case there is suspicion on the relationship between the mandate
holder and the actual client or in case the behavior of the mandate
holder is suspicious, do take necessary advice from the Business
Head.
MONITORING OF TRANSACTIONS
RGX RESEARCH PRIVATE LIMITED regular monitors the
transactions to identify any deviation in transactions/activity for
ensuring the effectiveness of the AML procedures.
RGX RESEARCH PRIVATE LIMITED shall pay special attention to
all unusually large transactions/ patterns which appears to have no
economic purpose.
RGX RESEARCH PRIVATE LIMITED may specify internal
threshold limits for each class of client accounts on the basis of
various plans and pay special attention to transactions which exceed
these limits
The background including all documents/office
records /memorandums/clarifications sought pertaining to such
transactions and purpose thereof shall also be examined carefully and
findings shall be recorded in writing. Further such findings, records
and related documents shall be made available to auditors and also to
SEBI/stock exchanges/FIU-IND/other relevant Authorities, during
audit, inspection, or as and when required. These records are required
to be maintained and preserved for a period of five years from the date
of transaction between the client and intermediary as is required under
PMLA.
CASH TRANSACTIONS
All are requested not to accept cash from the clients whether against
obligations or as margin for purchase of securities or otherwise. All
payments shall be received from the clients strictly by account payee
crossed cheques drawn in favor of RGX RESEARCH PRIVATE LIMITED.
The same is also required as per SEBI circular no. SMD/ED/IR/3/23321
dated November 18, 1993 and SEBI/MRD/SE/Cir-33/2003/27/08 dated
August 27, 2003.
In case account payee cheques have been received from a bank account
other than that captured in records the same can be accepted after
ascertaining that the client is the first holder of the account. Only in
exceptional cases, bank draft/pay-order may be accepted from the client
provided identity of the remitter/purchaser written on the draft/pay-order
matches with that of client else obtain a certificate from the issuing bank to
verify the same.
Reliance on a third party for carrying out Client Due Diligence (CDD)
RGX RESEARCH PRIVATE LIMITED may rely on a third party for the
purpose of
Identification and verification of the identity of a client and
Determination of whether the client is acting on behalf of a beneficial
owner, identification of the beneficial owner
Verification of the identity of the beneficial owner.
Such third party shall be regulated, supervised or monitored for, and have
measures in place for compliance with CDD and record-keeping
requirements in line with the obligations under the PML Act. Such reliance
shall be subject to the conditions that are specified in Rule 9 (2) of the PML
Rules and shall be in accordance with the regulations and circulars/
guidelines issued by SEBI from time to time. Further, it is clarified that
RGX RESEARCH PRIVATE LIMITED shall be ultimately responsible for
CDD and undertaking enhanced due diligence measures, as applicable.
RECORD KEEPING
RGX RESEARCH PRIVATE LIMITED shall ensure compliance with the
record keeping requirements contained in the SEBI Act, 1992, Rules and
Regulations made there-under, PMLA as well as other relevant legislation,
Rules, Regulations, Exchange Bye- laws and Circulars.
More specifically, RGX RESEARCH PRIVATE LIMITED shall put in
place a system of maintaining proper record of transactions prescribed under
Rule 3 of PML Rules as mentioned below:
all cash transactions of the value of more than ten lakh rupees or its
equivalent in foreign currency;
all series of cash transactions integrally connected to each other which
have been individually valued below rupees ten lakh or its equivalent
in foreign currency where such series of transactions have taken place
within a month and the monthly aggregate exceeds an amount of ten
lakh rupees or its equivalent in foreign currency
all cash transactions where forged or counterfeit currency notes or
bank notes have been used as genuine or where any forgery of a
valuable security or a document has taken place facilitating the
transactions;
all suspicious transactions whether or not made in cash and by way of
as mentioned in the Rules.
Retention of Records:
The following document retention terms should be observed:
All necessary records on transactions, both domestic and international,
should be maintained at least for the minimum period of ten years (10)
from the date of cessation of the transaction.
Records on customer identification (e.g. copies or records of official
identification documents like passports, identity cards, driving
licenses, or similar documents), account files, books of account, and
business correspondence should also be kept for ten years from the
date of cessation of the transaction.
Records shall be maintained in hard and soft copies.
It should be ensured that there is continuity in dealing with the client as normal until told otherwise and the client should not be told of the
report /suspicion. In exceptional circumstances, consent may not be
given to continue to operate the account and transactions
Records shall be maintained in hard and soft copies
RGX RESEARCH PRIVATE LIMITED shall take appropriate steps
to evolve an internal mechanism for proper maintenance and
preservation of such records and information in a manner that allows
easy and quick retrieval of data as and when requested by the
competent authorities.
SUSPICIOUS TRANSACTIONS MONITORING AND REPORTING
RGX RESEARCH PRIVATE LIMITED, on an ongoing basis, monitors the
transactions executed by the client in order to ascertain whether the same is
“suspicious‟ which should be reported to FIU, India. Followings are the
Surveillance/ Alerts based on the client’s transactions on NSE/BSE/DP and
circumstances, which may be in the nature of suspicious transactions.
Suspicious Transactions are those which:
gives rise to reasonable grounds of suspicion that it may involve
proceeds of crime
appears to be made in circumstances of unusual or unjustified
complexity
appears to have no economic rationale or bona fide purpose
Criteria for Ascertaining Suspicious Transactions
Whether a particular transaction is suspicious or not will depend upon
the Client’s details of the transactions/Identity/Receipt/ Payment
pattern and other facts and circumstances.
Clients whose identity verification is difficult which includes non-cooperation of the client
Clients belonging to (or) introduced by persons/entities in high-risk countries
Increase in clients’ business without justification and Turnover not
commensurate with financials
Unusual large cash deposits
Overseas receipts/payments of funds with or without instructions to
pay in cash transaction.
Transfer of proceeds to unrelated parties
Negotiated trades /Matched trades.
Relation of the client with the LLP/Designated Partners
Unusually large transactions like, clients having traded in
scrip/shares of a LLP over a threshold Quantity /value in a single day and
volume in that scrip of that client is above a threshold percentage of the total
volume in that scrip of the Exchange.
Clients making huge and regular losses and are still placing
trades/orders and further identifying the sources of funds in such cases.
Large volume in the proprietary account of SubBrokers/Affiliates/Dealer
Asset management services for Clients where the source of the funds
is not clear or not in
Keeping with the Client’s apparent standing /business activity;
Clients based in high-risk jurisdictions;
Unusual transactions are undertaken by “Client of the special category (CSCs)”, i.e. offshore etc
RECORDS OF THE INFORMATION REPORTED TO THE DIRECTOR, (FIU – IND)
RGX RESEARCH PRIVATE LIMITED shall maintain and preserve the
records of information related to transactions, whether attempted or
executed, which are reported to the Director, FIU – IND, as required under
Rules 7 and 8 of the PML Rules, for a period of five years from the date of
the transaction between the client and RGX RESEARCH PRIVATE
LIMITED
List of Designated Individuals/ Entities
An updated list of individuals and entities which are subject to various
sanction measures such as freezing of assets/accounts, denial of financial
services etc., as approved by the Security Council Committee established
pursuant to various United Nations' Security Council Resolutions
(UNSCRs) can be accessed at its website.
RGX RESEARCH PRIVATE LIMITED ensures that accounts are not
opened in the name of anyone whose name appears in said list. RGX
RESEARCH PRIVATE LIMITED shall continuously scan all existing
accounts to ensure that no account is held by or linked to any of the entities
or individuals included in the list. Full details of accounts bearing
resemblance with any of the individuals/entities in the list shall immediately
be intimated to SEBI and FIU- IND.
Procedure for freezing of funds, financial assets or economic resources, or related services
Section 51A of the Unlawful Activities (Prevention) Act, 1967 (UAPA),
relating to the purpose of prevention of money laundering, and coping with
terrorist activities was brought into effect through UAPA Amendment Act,
2008. In this regard, the Central Government has issued an order dated
August 27, 2009 detailing the procedure for the implementation of Section 51A of the UAPA. Also referring to notification no.
SEBI/HO/MIRSD/DOP/CIR/P/2021/36 dated March 25, 2021
Under the aforementioned section, the Central Government is empowered to
freeze, seize or attach funds and other financial assets or economic resources
held by, on behalf of, or at the direction of the individuals or entities listed
in the Schedule to the Order, or any other person engaged in or suspected to
be engaged in terrorism. The Government is also further empowered to
prohibit any individual or entity from making any funds, financial assets or
economic resources, or related services available for the benefit of the
individuals or entities listed in the Schedule to the Order or any other person
engaged in or suspected to be engaged in terrorism.
RGX RESEARCH PRIVATE LIMITED shall ensure effective and
expeditious implementation of the procedure laid down in the UAPA Order
dated August 27, 2009, and order dated February 02, 2021.
REPORTING TO FINANCIAL INTELLIGENCE UNIT-INDIA
In terms of the PML Rules, RGX RESEARCH PRIVATE LIMITED is
required to report information relating to cash and suspicious transactions to
the Director, Financial Intelligence Unit-India (FIU- IND) at the following
address:
RGX RESEARCH PRIVATE LIMITED shall carefully go through all the
reporting requirements and formats that are available on the website of
Financial Intelligence Unit–India under the Section Obligation of Reporting Entity – Furnishing Information – Reporting Format.
These documents contain detailed directives on the compilation and
manner/procedure of submission of the reports to FIU-IND. The related
hardware and technical requirements for preparing reports, the related data
files, and data structures thereof are also detailed in these documents. While
detailed instructions for filing all types of reports are given in the
instructions part of the related formats.
ADHERENCE
The Cash Transaction Report (CTR) (wherever applicable) for each
month shall be submitted to FIU-IND by 15th of the succeeding
month.
The Suspicious Transaction Report (STR) shall be submitted within 7
days of arriving at a conclusion that any transaction, whether cash or
non-cash, or a series of transactions integrally connected are of
suspicious nature. The Principal Officer shall record his reasons for
treating any transaction or a series of transactions as suspicious. It
shall be ensured that there is no undue delay in arriving at such a
conclusion.
The Non-Profit Organization Transaction Reports (NTRs) for each
month shall be submitted to FIU-IND by 15th of the succeeding
month.
The Principal Officer will be responsible for timely submission of
CTR, STR and NTR to FIU-IND.
Utmost confidentiality shall be maintained in filing of CTR, STR and
NTR to FIU- IND.
No nil reporting needs to be made to FIU-IND in case there are no
cash/ suspicious/ non – profit organization transactions to be reported.
RGX RESEARCH PRIVATE LIMITED shall not put any restrictions on
operations in the accounts where an STR has been made. RGX RESEARCH PRIVATE LIMITED
and its Designated Partners, officers and employees
(permanent and temporary) shall be prohibited from disclosing (“tipping
off”) the fact that a STR or related information is being reported or provided
to the FIU-IND. This prohibition on tipping off extends not only to the
filing of the STR and/ or related information but even before, during and
after the submission of an STR. Thus, it shall be ensured that there is no
tipping off to the client at any level. It is clarified that the RGX
RESEARCH PRIVATE LIMITED irrespective of the amount of transaction
and/or the threshold limit envisaged for predicate offences specified in part
B of Schedule of PMLA, 2002, shall file STR if RGX RESEARCH
PRIVATE LIMITED has reasonable grounds to believe that the transactions
involve proceeds of crime.
DESIGNATION OF OFFICERS FOR ENSURING COMPLIANCE WITH PROVISIONS OF PMLA
Appointment of a Principal Officer:
To ensure that RGX RESEARCH PRIVATE LIMITED properly discharges
its legal obligations to report suspicious transactions to the authorities, the
Principal Officer would act as a central reference point in facilitating
onward reporting of suspicious transactions and for playing an active role in
the identification and assessment of potentially suspicious transactions and
shall have access to and be able to report to senior management at the next
reporting level.
Mr. Ritesh G Gokani, who is the Principal Officer of RGX RESEARCH
PRIVATE LIMITED is appointed as Principal Officer The details of his
appointment has been intimated to the Financial Intelligence Unit, India
(FIU - IND).
Names, designation, and addresses (including email addresses) of ‘Principal
Officer’ including any changes therein shall also be intimated to the Office
of the Director-FIU. As a matter of principle, the ‘Principal Officer’ of RGX
RESEARCH PRIVATE LIMITED will be in a sufficiently senior position and is able to discharge the functions with independence and authority
Appointment of a Designated Partner:
In addition to the existing requirement of designation of a Principal Officer,
RGX RESEARCH PRIVATE LIMITED shall also designate a person as a
'Designated Partner'.
Designated partner means a person designated by the reporting entity to
ensure overall compliance with the obligations imposed under chapter IV of
the Act and the Rules and includes –
the Managing Director or a Whole-Time Director duly authorizes by
the Board of Directors if the reporting entity is a company,
the managing partner if the reporting entity is a partnership firm,
the proprietor if the reporting entity is a proprietorship firm,
the managing trustee if the reporting entity is a trust,
a person or individual, as the case may be, who controls and manages
the affairs of the reporting entity if the reporting entity is an
unincorporated association or a body of individuals, and
such other person or class of persons as may be notified by the
Government if the reporting entity does not fall in any of the
categories above.
In terms of Section 13 (2) of the PMLA, the Director, FIU – IND can take
appropriate action, including levying monetary penalty, on the Designated Director
for failure of RGX RESEARCH PRIVATE LIMITED to comply with any of its
AML obligations.
Hiring of Employees: RGX RESEARCH PRIVATE LIMITED shall have adequate screening procedures
in place to ensure high standards when hiring employees. They shall identify the
key positions within its own organizational structures having regard to the risk of
money laundering and terrorist financing and the size of their business and ensure
the employees taking up such key positions are suitable and competent to perform
their duties.
Employees’ Training: RGX RESEARCH PRIVATE LIMITED has an ongoing employee training
program so that the members of the staff are adequately trained in AML,
Combating the Financing of Terrorism (‘CFT’) and other relevant procedures.
Training requirements shall have specific focuses for frontline staff, back-office
staff, compliance staff, risk management staff and staff dealing with new clients. It
is crucial that all those concerned fully understand the rationale behind these
directives, obligations, and requirements and implement them consistently and are
sensitive to the risks of their systems being misused by unscrupulous elements.
INVESTORS EDUCATION
Implementation of AML measures requires RGX RESEARCH PRIVATE
LIMITED to demand certain information from investors which may be of personal
nature or has hitherto never been called for. Such information can include
documents evidencing source of funds/income tax returns/bank records etc. This
can sometimes lead to raising of questions by the client with regard to the motive
and purpose of collecting such information. There is, therefore, a need for RGX
RESEARCH PRIVATE LIMITED to sensitize its clients about these requirements
as the ones emanating from AML frameworks and Combating terrorism.
ADDITIONAL VALUES
RGX RESEARCH PRIVATE LIMITED shall ensure the following:
RGX RESEARCH PRIVATE LIMITED shall ensure that the content of these
Directives is understood by all staff members
RGX RESEARCH PRIVATE LIMITED will regularly review the policies and procedures for the prevention of AML on an annual basis to ensure their
effectiveness. Further, in order to ensure the effectiveness of policies and
procedures, the person doing such a review shall be different from the one
who has framed such policies and procedures.
RGX RESEARCH PRIVATE LIMITED will adopt client acceptance policies
and procedures that are sensitive to the risk of AML
RGX RESEARCH PRIVATE LIMITED will undertake client due diligence
(“CDD”) measures to an extent that is sensitive to the risk of AML depending
on the type of client, business relationship, or transaction
RGX RESEARCH PRIVATE LIMITED have in system a place for
identifying, monitoring, and reporting suspected ML or TF transactions to the
law enforcement authorities; and
RGX RESEARCH PRIVATE LIMITED will develop staff members’
awareness and vigilance to guard against ML and TF
This policy is reviewed and approved at the Board meeting held on the 20th day of December, 2025 at the registered office of the company.
Designated Principal Officer – Ritesh G Gokhani
In compliance with SEBI guidelines and as per SEBI Master Circular dated June 06, 2024 Mr. Ritesh G Gokhani is appointed Principal Officer. He will be responsible for implementing and enforcing the AML/CFT framework, monitoring transactions, and filing STRs with FIU-IND. In the case of any further information/clarification is required in this regard, the “Principal Officer” may be contacted.
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By RGX Research Pvt Ltd.
Registration Details:
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