ANTI-MONEY LAUNDERING (AML) AND COMBATING THE FINANCING OF TERRORISM (CFT) POLICY
Effective Date: 27 February 2026
Version: 1.0
Approved By: Board of Directors
SEBI Registration No.: NSE CM INB230752136, NSE F&O INF230752136.
1. BACKGROUND
This Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Policy (“Policy”) is adopted in accordance with:
- The Prevention of Money Laundering Act, 2002 (“PMLA”)
- The Prevention of Money-Laundering (Maintenance of Records) Rules, 2005
- SEBI Master Circular No. SEBI/HO/MIRSD/MIRSDSECFATF/P/CIR/2024/78 dated June 06, 2024
1717664538363 Anti Money Laund… - Guidelines, circulars and directions issued by SEBI from time to time
- Unlawful Activities (Prevention) Act, 1967 (UAPA)
- Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005
- FATF Recommendations and related Government notifications
Sri Sairam Global Securities Limited (“the Company”) is a SEBI-registered Stock Broker and a Reporting Entity under PMLA and is obligated to establish, implement and maintain effective AML/CFT controls.
2. OBJECTIVE
The objectives of this Policy are:
- To prevent the Company from being used for money laundering (ML) or terrorist financing (TF).
- To establish systems for identification, monitoring, and reporting of suspicious transactions.
- To ensure compliance with PMLA and SEBI Master Circular dated June 06, 2024
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. - To adopt a Risk-Based Approach (RBA) to AML/CFT compliance.
- To protect the integrity of the securities market.
The Company adopts a zero-tolerance approach toward financial crime.
3. GOVERNANCE FRAMEWORK
3.1 Designated Director
In accordance with Rule 2(ba) of PML Rules:
Name: D V Raju
Designation: Managing Director / Whole-time Director
The Designated Director is responsible for ensuring overall compliance with Chapter IV of PMLA and applicable AML/CFT rules.
3.2 Principal Officer
In accordance with Rule 2(f) of PML Rules:
Name: D V Raju
Designation: Compliance Officer
Email: dvr@srisairamgroups.com
Responsibilities include:
- Filing STR, CTR and other reports with FIU-IND
- Monitoring suspicious transactions
- Acting as central reference point for AML matters
- Reporting to senior management and Board
- Maintaining confidentiality of AML reporting
Details shall be intimated to FIU-IND as required.
4. CLIENT DUE DILIGENCE (CDD)
No account shall be opened or transaction executed without completing CDD.
4.1 Customer Identification Procedure (CIP)
At onboarding, the Company shall:
- Verify client identity using reliable and independent documents
- Verify PAN, Aadhaar (as applicable)
- Conduct In-Person Verification (IPV) or Video KYC
- Identify beneficial ownership
- Obtain purpose and intended nature of business relationship
- Collect occupation and financial information
- Obtain income proof for F&O segment, where required
- Conduct screening against sanction lists (UNSC, UAPA, etc.)
No anonymous, fictitious, or benami accounts shall be permitted.
4.2 Beneficial Ownership Identification
In accordance with SEBI Master Circular dated June 06, 2024
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- Companies: Natural persons owning more than 10%
- Partnership firms: Natural persons owning more than 10% of capital/profits
- Unincorporated associations: Natural persons owning more than 15%
- Trusts: Identification of author, trustee, settlor, beneficiaries (≥10%), protector
- Listed companies: Exemption as permitted under SEBI guidelines
Enhanced Due Diligence (EDD) shall apply for complex ownership structures.
5. CLIENT ACCEPTANCE POLICY
Accounts shall not be opened where:
- Identity cannot be verified
- Client refuses KYC compliance
- Suspicion of ML/TF exists
- Client appears on designated sanction lists
- Information provided appears non-genuine
5.1 Client Risk Categorization
Clients shall be categorized as:
- Low Risk
- Medium Risk
- High Risk
Risk classification based on:
- Geographical location
- Nature of business
- Trading volume
- Source of funds
- PEP status
- Mode of account opening
- Transaction patterns
Clients of Special Category (CSC)
- Non-resident clients
- High Net-worth Individuals
- Trusts / NGOs / Charitable institutions
- Politically Exposed Persons (PEPs)
- Clients in high-risk jurisdictions
- Non-face-to-face clients
High-risk clients shall undergo enhanced monitoring and periodic KYC review.
6. RISK-BASED APPROACH (RBA)
The Company adopts a Risk-Based Approach consistent with SEBI Master Circular
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The Company shall:
- Conduct periodic AML risk assessments
- Monitor new products and delivery mechanisms
- Assess country/geographic risk using FATF statements
- Apply enhanced due diligence for high-risk clients
- Document and review risk assessment regularly
Simplified due diligence shall not apply where suspicion exists.
7. ONGOING MONITORING OF TRANSACTIONS
The Company shall:
- Monitor unusual or complex transactions
- Monitor dormant accounts with sudden activity
- Track structured transactions
- Review abnormal F&O losses
- Monitor large value transactions without economic purpose
Findings shall be documented and preserved.
8. SUSPICIOUS TRANSACTION REPORTING (STR)
Examples of suspicious activity include:
- Unusual increase in turnover
- Transactions lacking economic rationale
- Frequent transfers to unrelated third parties
- Attempts to avoid KYC compliance
- Aborted or incomplete suspicious transactions
STR shall be filed with FIU-IND within 7 days of identifying suspicion.
No tipping-off shall be permitted.
9. CASH TRANSACTION REPORT (CTR)
Where applicable:
- Cash transactions exceeding ₹10 lakh
- Structuring below threshold aggregating above ₹10 lakh
CTR shall be filed by the 15th of the succeeding month.
10. RECORD KEEPING & RETENTION
The Company shall maintain:
- Nature and value of transactions
- Date of transaction
- Parties involved
- Identity documents
- Beneficial ownership records
- Audit trail of funds
Retention Period:
- 5 years from date of transaction
- 5 years after account closure
- Longer if investigation ongoing
As required under Section 12 of PMLA and SEBI Master Circular
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11. SANCTIONS SCREENING & FREEZING OF ACCOUNTS
In compliance with:
- Section 51A of UAPA
- Section 12A of WMD Act
- UNSC Sanctions Lists
The Company shall:
- Screen clients against designated lists
- Freeze accounts where required
- Inform Central Nodal Officer
- Inform SEBI
- File STR
- Prevent asset transfers
Automated screening tools shall be used.
12. ABNORMAL / NON-GENUINE TRADES
In line with exchange circulars, the Company may:
- Withhold equivalent trade amounts
- Report to stock exchange
- Block trading privileges
- Seek client explanation
Exchange decision shall be final and binding.
13. THIRD-PARTY RELIANCE
Reliance on third parties for CDD permitted only where:
- Third party is regulated
- CDD records accessible immediately
- Third party not in high-risk jurisdiction
- Ultimate responsibility remains with Company
14. EMPLOYEE SCREENING & TRAINING
14.1 Hiring
Background verification conducted for sensitive roles.
14.2 Training
Regular AML/CFT training for:
- Front office
- Back office
- Compliance
- Risk management
Training attendance records maintained.
15. INTERNAL AUDIT & COMPLIANCE REVIEW
- Independent AML audit
- Periodic compliance review
- Exception reporting
- Board reporting
- Annual policy review
16. CONFIDENTIALITY
All STR, CTR and related reporting shall remain confidential.
No employee shall disclose filing of STR.
Violation shall result in disciplinary action.
17. INVESTOR EDUCATION
The Company may collect:
- Income proof
- Source of funds
- Bank statements
Clients shall be sensitized regarding AML/CFT requirements.
18. POLICY REVIEW
This Policy shall be:
- Reviewed annually
- Updated in line with regulatory changes
- Approved by the Board
19. BOARD RESOLUTION TEMPLATE (COPY & USE)
RESOLVED THAT the Board hereby approves and adopts the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Policy of the Company in compliance with PMLA and SEBI Master Circular dated June 06, 2024
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FURTHER RESOLVED THAT the Designated Director and Principal Officer are authorized to implement the Policy and ensure compliance.
20. DECLARATION
The Management of Sri Sairam Global Securities Limited affirms full commitment to AML/CFT compliance under:
- PMLA
- SEBI Master Circular dated June 06, 2024
1717664538363 Anti Money Laund… - UAPA
- WMD Act
- Applicable Government Notifications
Definitions:
AML: Anti-Money Laundering
CFT: Combating the Financing of Terrorism
PMLA: Prevention of Money Laundering Act, 2002
CDD: Client Due Diligence
EDD: Enhanced Due Diligence
STR: Suspicious Transaction Report
CTR: Cash Transaction Report
FIU-IND: Financial Intelligence Unit – India
PEP: Politically Exposed Person
UNSC: United Nations Security Council
Periodic KYC Updation
The Company shall update client KYC records periodically as per SEBI and PMLA requirements:
– High Risk Clients: At least every 2 years
– Medium Risk Clients: At least every 8 years
– Low Risk Clients: At least every 10 years
The Company reserves the right to request additional documents at any time based on risk assessment.
Politically Exposed Persons (PEPs)
Accounts of Politically Exposed Persons shall be opened only with approval of senior management. Enhanced monitoring and periodic review shall be conducted for such accounts.
Internal Reporting Mechanism
Employees shall immediately report suspicious activities to the Principal Officer. No employee shall attempt independent investigation. Whistleblower protection shall be provided to employees reporting in good faith.