This
policy applies to all RightFX officers, appointed producers and products and
services offered by RightFX. All business units and locations within RightFX will
cooperate to create a cohesive effort in the fight against money laundering.
Each business unit and location has implemented risk-based procedures
reasonably expected to prevent, detect and cause the reporting of transactions.
All efforts exerted will be documented and retained. The AML Compliance
Committee is responsible for initiating Suspicious Activity Reports ('SARs') or
other required reporting to the appropriate law enforcement or regulatory
agencies. Any contacts by law enforcement or regulatory agencies related to the
Policy shall be directed to the AML Compliance Committee.
The
committee shall:
·
Receive internal reports of (suspicions of) money
laundering
·
Investigate reports of suspicious events
·
Make reports of relevant suspicious events to the
relevant authorities
·
Ensure the adequacy of arrangements made for the
awareness and training of staff and advisers
·
Report at least annually to the firm’s governing body on
the operation and effectiveness of the firm’s systems and controls.
·
Monitor the day-to-day operation of anti-money laundering
policies in relation to: the development of new products; the taking on of new
customers; and changes in the firm’s business profile.
It is
the policy of RightFX to actively pursue the prevention of money laundering and
any activity that facilitates money laundering or the funding of terrorist or
criminal activities. RightFX is committed to AML compliance in accordance with
applicable law and requires its officers, employees and appointed producers to
adhere to these standards in preventing the use of its products and services
for money laundering purposes.
For the
purposes of the Policy, money laundering is generally defined as engaging in
acts designed to conceal or disguise the true origins of criminally derived
proceeds so that the unlawful proceeds appear to have been derived from
legitimate origins or constitute legitimate assets.
Money
laundering is the process by which criminally obtained money or other assets
(criminal property) are exchanged for “clean” money or other assets with no
obvious link to their criminal origins.
Criminal
property may take any form, including money or money’s worth, securities,
tangible property and intangible property. It also covers money, however come
by, which is used to fund terrorism.
Money
laundering activity includes:
·
Acquiring, using, or possessing criminal property
·
Handling the proceeds of crimes such as theft, fraud, and
tax evasion
·
Being knowingly involved in any way with criminal or
terrorist property
·
Entering into arrangements to facilitate laundering criminal
or terrorist property
·
Investing the proceeds of crimes in other financial
products
·
Investing the proceeds of crimes through the acquisition
of property/assets
·
Transferring criminal property.
There is
no single stage of money laundering; methods can range from the purchase and
resale of luxury items such as a car or jewellery to passing money through a
complex web of legitimate operations. Usually, the starting point will be cash,
but it is important to appreciate that money laundering is defined in terms of
criminal property. This can be property in any conceivable legal form, whether
money, rights, real estate or any other benefit; if you know or suspect that it
was obtained, either directly or indirectly, as a result of criminal activity
and you do not speak up, then you too are taking a part in the process.
The
money laundering process follows three stages:
No
financial sector business is immune from the activities of criminals and Firms
should consider the money laundering risks posed by the products and services
they offer.
Terrorist
financing is the process of legitimate businesses and individuals that may
choose to provide funding to resource terrorist activities or organisations for
ideological, political or other reasons. Firms must therefore ensure that: (i)
customers are not terrorist organisations themselves; and (ii) they are not
providing the means through which terrorist organisations are being funded.
Terrorist
financing may not involve the proceeds of criminal conduct, but rather an
attempt to conceal the origin or intended use of the funds, which will later be
used for criminal purposes.
The
level of due diligence required when considering anti-money laundering procedures
within the firm, it should take a risk-based approach. This means the amount of
resources spent in conducting due diligence in any one relationship that is
subject risk should be in proportion to the magnitude of the risk that is posed
by that relationship.
These
can be broken down into the following areas:
Different
customer profiles have different levels of risks attached to them. A basic Know
your Customer (KYC) check can establish the risk posed by a customer. For
example, near-retired individuals making small, regular contributions to a
savings account in line with their financial details poses less of a risk than
middle-aged individuals making ad-hoc payments of ever-changing sizes into a
savings account that does not fit into the profile of the customers’ standing
financial data. The intensity of the due diligence conducted on the latter
would be higher than that carried out on the former as the potential threat of
money laundering in the second case would be perceived as being greater.
Corporate structures can be used as examples of customers that could carry a
higher risk profile than the one just seen, as these can be used by criminals
to introduce layers within transactions to hide the source of the funds, and
like that, clients can be categorised into different risk bands.
This is
the risk posed by the product or service itself. The product risk is driven by
its functionality as a money laundering tool.
The
Joint Money Laundering Steering Group has categorised the products with which
Firms typically deal into three risk bands – reduced, intermediate and
increased. Typically, pure protection contracts are categorised as reduced risk
and investments in unit trusts as increased risk. Additionally, a factor that will
contribute to the classification of the risk category is sales process
associated with the product. If the transaction in the product takes place on
an advisory basis as a result of a KYC, this will carry less risk than an
execution only transaction, whereby you know significantly less about the
customer.
The
geographic location of the client or origin of the business activity has a risk
associated with it, this stems from the fact that countries around the globe
have different levels of risk attached to them.
A firm
would determine the extent of their due diligence measure required initially
and on an ongoing basis using the above four risk areas.
RightFX has
adopted a Customer Identification Program (CIP). RightFX will provide notice
that they will seek identification information; collect certain minimum
customer identification information from each customer, record such information
and the verification methods and results.
RightFX will
provide notice to customers that it is requesting information from them to
verify their identities, as required by applicable law.
When a
business relationship is formed, in order to establish what might constitute
normal activity later in the relationship, it is necessary for the company to
ascertain the nature of the business a client expects to conduct.
Once an
on-going business relationship has been established, any regular business
undertaken for that customer can be assessed against the expected pattern of
activity of the customer. Any unexplained activity can then be examined to
determine whether there is a suspicion of money laundering or terrorist
financing.
Information
regarding a client’s income, occupation, source of wealth, trading habits and
the economic purpose of any transaction is typically gathered as part of the
provision of advice. At the start of the relationship personal information is
also obtained, such as, nationality, date of birth, and residential address.
These pieces of information should also be considered in respect to the risk of
financial crime (including AML and CTF). For high risk transactions, it might
be appropriate to seek verification of the information the client has provided.
When a
transaction takes place, the source of funds, i.e. how the payment is to be
made, from where and by who, must always be ascertained and recorded in the
client file (this would usually be achieved through retaining a copy of the
cheque or direct debit mandate).
The
standard identification requirement for customers who are private individuals
are generally governed by the circumstances relating to the customer and the
product type that is being dealt in, i.e. the level of risk attributed to the
product whether it is a reduced risk, intermediate risk or an increased risk
product. Taking that into account for reduced risk and intermediate risk
products the following pieces of information are required as a standard for
identification purposes:
·
Full Name
·
Residential Address
Verification
of the information obtained must be based on reliable and independent sources –
which might either be documents produced by the customer, or electronically by
the firm, or by a combination of both. Where business is conducted
face-to-face, firms should see originals of any documents involved in the
verification.
If
documentary evidence of an individual’s identity is to provide a high level of
confidence, it will typically have been issued by a government department or
agency, or by a court, because there is a greater likelihood that the
authorities will have checked the existence and characteristics of the persons
concerned. In cases where such documentary evidence of identity may not be
available to an individual, other evidence of identity may give the firm
reasonable confidence in the customer’s identity, although the firm should
weigh these against the risks involved.
If the
identity is to be verified from documents, this should be based on:
Either a
government issued document which incorporates:
·
The customer’s full name, and
·
Their residential address
Photographic
Government Issued Identity Documents:
·
Valid passport
·
National Identity card
Alternatively,
this can be done by a non-photographic government issued document which
incorporates the customer’s full name, supported by a second document, which
incorporates:
·
The customer’s full name, and
·
Their residential address
RightFX does
not limit the time for the Client to submit their verification documents,
however submitting them is an obligatory requirement for the Client to withdraw
their funds.
RightFX undertakes
to review the submitted documents within 48 hours from the date of receiving
them.
Transaction
based monitoring will occur within the appropriate business units of RightFX.
Monitoring of specific transactions will include but is not limited to
transactions aggregating $5,000 or more and those with respect to which RightFX
has a reason to suspect suspicious activity. All reports will be documented.
There are
signs of suspicious activity that suggest money laundering. These are commonly
referred to as 'red flags'. If a red flag is detected, additional due diligence
will be performed before proceeding with the transaction. If a reasonable
explanation is not determined, the suspicious activity shall be reported to the
AML Compliance Committee.
Examples
of red flags are:
·
The customer exhibits unusual concern regarding the
firm's compliance with government reporting requirements and the firm's AML
policies, particularly with respect to his or her identity, type of business
and assets, or is reluctant or refuses to reveal any information concerning
business activities, or furnishes unusual or suspect identification or business
documents.
·
The customer wishes to engage in transactions that lack
business sense or apparent investment strategy, or are inconsistent with the
customer's stated business strategy.
·
The information provided by the customer that identifies
a legitimate source for funds is false, misleading, or substantially incorrect.
·
Upon request, the customer refuses to identify or fails
to indicate any legitimate source for his or her funds and other assets.
·
The customer (or a person publicly associated with the
customer) has a questionable background or is the subject of news reports
indicating possible criminal, civil, or regulatory violations.
·
The customer exhibits a lack of concern regarding risks,
commissions, or other transaction costs.
·
The customer appears to be acting as an agent for an
undisclosed principal, but declines or is reluctant, without legitimate
commercial reasons, to provide information or is otherwise evasive regarding
that person or entity.
·
The customer has difficulty describing the nature of his
or her business or lacks general knowledge of his or her industry.
·
The customer attempts to make frequent or large deposits
of currency, insists on dealing only in cash equivalents, or asks for
exemptions from the firm's policies relating to the deposit of cash and cash
equivalents.
·
For no apparent reason, the customer has multiple
accounts under a single name or multiple names, with a large number of
inter-account or third-party transfers.
·
The customer's account has unexplained or sudden
extensive activity, especially in accounts that had little or no previous
activity.
·
The customer's account has a large number of wire
transfers to unrelated third parties inconsistent with the customer's
legitimate business purpose.
·
The customer's account has wire transfers that have no
apparent business purpose to or from a country identified as money laundering
risk or a bank secrecy haven.
·
The customer's account indicates large or frequent wire
transfers, immediately withdrawn by check or debit card without any apparent
business purpose.
·
The customer makes a funds deposit followed by an
immediate request that the money be wired out or transferred to a third party,
or to another firm, without any apparent business purpose.
·
The customer makes a funds deposit for the purpose of
purchasing a long-term investment followed shortly thereafter by a request to
liquidate the position and transfer of the proceeds out of the account.
·
The customer requests that a transaction be processed in
such a manner to avoid the firm's normal documentation requirements.
A
suspicious transaction will often be one which is inconsistent with a
customer's known, legitimate business or personal activities or with the normal
business for that type of customer. Therefore, the first key to recognition is
knowing enough about the customer's business to recognise that a transaction,
or series of transactions, is unusual.
Questions
you must consider when determining whether an established customer’s
transaction might be suspicious are:
·
Is the size of the transaction consistent with the normal
activities of the customer?
·
Is the transaction rational in the context of the
customer’s business or personal activities?
·
Has the pattern of transactions conducted by the customer
changed?
Issues
which should lead you to have cause for suspicion would include:
·
Clients who are reluctant to provide proof of identity;
·
Clients who place undue reliance on an introducer (they
may be hiding behind the introducer to avoid giving you a true picture of their
identity or business);
·
Requests for cash related business, for example questions
about whether investments can be made in cash, suggestions that funds might be
available in cash for investment;
·
Where the source of funds for investment is unclear;
·
Where the magnitude of the available funds appears
inconsistent with the client’s other circumstances (i.e. the source of wealth
is unclear). Examples might be students or young people with large amounts to
invest;
·
Where the transaction doesn’t appear rational in the
context of the customer’s business or personal activities. Particular care
should be taken in this area if the client changes their method of dealing with
you without reasonable explanation;
·
Where the pattern of transactions changes;
·
Where a client who is undertaking transactions that are
international in nature does not appear to have any good reason to be
conducting business with the countries involved (e.g. why do they hold money in
the particular country that the funds are going to or from? Do their
circumstances suggest that it would be reasonable for them to hold funds in
such countries?);
·
Clients who are unwilling to provide you with normal
personal or financial information, for no apparent or rational reason. (Care
should be taken not to include all distance relationships as suspicious,
because most will be for genuine reasons. Suspicions will ordinarily be based
upon cumulative as opposed to stand alone issues)
A money
launderer is likely to provide persuasive arguments about the reasons for their
transactions. Those should be questioned to decide whether a transaction is
suspicious.
Where,
for whatever reason, we suspect that a client, or anybody for whom they are
acting, may be undertaking (or attempting to undertake) a transaction involving
the proceeds of any crime it must be reported as soon as practicably possible
and in writing.
Internal
reports must be made regardless of whether any business was, or is intended to
be, actually written.
Upon
notification to the AML Compliance Committee an investigation will be commenced
to determine if a report should be made to the appropriate law enforcement or
regulatory agencies. The investigation will include, but not necessarily be
limited to, review of all available information, such as payment history, birth
dates, and address. If the results of the investigation warrant, a
recommendation will be made to the AML Compliance Committee to file the SAR
with the appropriate law enforcement or regulatory agency. The AML Compliance
Committee is responsible for any notice or filing with law enforcement or regulatory
agency.
Investigation
results will not be disclosed or discussed with anyone other than those who
have a legitimate need to know. Under no circumstances shall any officer,
employee or appointed agent disclose or discuss any AML concern, investigation,
notice or SAR filing with the person or persons subject of such, or any other
person, including members of the officer's, employee's or appointed agent's
family.
Where we know that the funds in an account derive from criminal activity, or that they arise from fraudulent instructions, the account must be frozen. Where it is believed that the account holder may be involved in the fraudulent activity that is being reported, then the account may need to be frozen.
The Client accepts and understands that the Company’s official language is English, and the Client should always read and refer to the English version of the Company’s Website and the terms and conditions for all information and disclosures about the Company and its activities. All translations or any information provided in languages other than English on the Company’s local websites is for informational purposes only and does not bind the Company or has any legal effect whatsoever. The Company shall not bear any responsibility or liability regarding the correctness of the information therein.
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