- KYC Policy
- Sway Markets and related entities partner with Sumsub.com for our KYC requirements. The Company shall follow customer identification procedure for opening of accounts and monitoring transactions of a suspicious nature for the purpose of reporting it to appropriate authority. The policy is based on Anti Money Laundering (AML) standards.
- 1. Information collected from the customer for the purpose of opening of account shall be kept confidential and the Company shall not divulge any details thereof for cross selling or any other purposes. Information sought from the customer shall be relevant to the perceived risk, shall not be intrusive, and shall be in conformity with the guidelines issued by Sway Markets from time to time. Any other information from the customer shall be sought separately with his/ her/ its consent and after opening the account.
- 2. The objective of the KYC policy is to prevent the Company from being used, intentionally or unintentionally, by criminal elements for money laundering activities. KYC procedures also enable the Company to know/understand its customers and their financial dealings better, which in turn help the Company to manage its risks prudently. The Company has framed its KYC policy incorporating four key elements:
(i) Customer Acceptance Policy;
(ii) Customer Identification Procedures;
(iii) Monitoring of Transactions/ On-going Due Diligence;
(iv) Risk Management.
- 3. For the purpose of the KYC policy:
(a) 'Beneficial Owner' refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.
(b) 'Customer' means a person that engages in a financial transaction or activity with the Company and includes a person on whose behalf the person that engages in the transaction or activity is acting.
(c) 'Customer Due Diligence (CDD)' means identifying and verifying the customer and the beneficial owner using 'Officially Valid Documents' as a 'proof of identity' and 'proof of address'.
(h) 'Politically Exposed Persons (PEPs)' include:
(i) Individuals who are or have been entrusted with prominent public functions domestically or by a foreign country.
(ii) International organization PEPs who are or have been entrusted with a prominent function by an international organization.
(iii) Family members related to a PEP either directly or through marriage.
(v) Close associates closely connected to a PEP.
(j) 'Principal Officer' means an officer designated by the Company.
- 4. Customer Acceptance Policy (CAP):
(i) No account shall be opened in anonymous or fictitious/benami name(s).
(ii) No transaction or account-based relationship will be undertaken without following the Customer Due Diligence (CDD) procedure.
a. The mandatory information to be sought for KYC purpose while opening an account and during the periodic updates should be obtained.
b. 'Optional'/additional information is obtained with the explicit consent of the customer after the account is opened.
c. CDD procedure is followed for all the joint account holders while opening a Joint Account.
(iii) Circumstances in which a customer is permitted to act on behalf of another person/entity should be clearly spelt out.
(iv) Parameters of risk assessment in terms of the customers’ identity, social/financial status, etc., have been defined to enable categorization of customers into low, medium and high risk.
(v) The Company shall not open an account where it is unable to apply appropriate CDD measures due to non-cooperation of the customer or non-reliability of the data/information furnished.
(vi) Before opening a new account, necessary screening will be performed to ensure the customer’s identity does not match with any person with known criminal background or banned entities.
(vii) For the purpose of risk categorisation, certain customers (e.g., individuals with well-defined income, government bodies, etc.) may be categorized as low risk, while others (e.g., trusts, NGOs, PEPs, etc.) would fall under enhanced due diligence.
- 5. Customer Identification Procedure (CIP)
Customer identification means identifying the customer and verifying their identity by using reliable, independent source documents, data, or information. The Company shall obtain sufficient information to establish, to its satisfaction, the identity of each new customer and the purpose of the intended nature of business relationship. For individuals, the Company will verify proof of identity, address, and recent photograph. For legal persons, the Company will verify legal status, identity of authorized persons, and beneficial owners. Introduction shall not be sought while opening accounts. The Company shall not ask the customer to furnish an additional OVD if the one provided contains both proof of identity and proof of address. A Unique Customer Identification Code (UCIC) will be assigned to all customers.
- 6. Monitoring of Transactions/On-going Due Diligence:
(a) The Company shall pay special attention to large or complex transactions, including RTGS transactions, and those with unusual patterns inconsistent with the normal activity of the customer.
(b) The Company shall prescribe threshold limits for specific categories of accounts and pay particular attention to transactions which exceed those prescribed thresholds.
(c) Currently, no cash transactions are undertaken, as all disbursements and repayments are made through banking channels.
(d) High-risk accounts shall be subjected to intensified monitoring and enhanced due diligence. The risk categorization of accounts will be reviewed at least once in six months.
(e) The records of transactions shall be preserved as required by the PML Act, 2002. Suspicious transactions will be reported as per law.
(f) If cash transactions were ever allowed, the Company would maintain a proper record of all such transactions and report them if they appear suspicious.
- 7. Risk Management:
(a) This policy ensures the formal documentation of the KYC program, and the management will establish appropriate procedures for effective implementation.
(b) The Company’s internal audit and compliance functions shall evaluate adherence to KYC policies and procedures. The Internal Auditors shall specifically check and verify the application of KYC procedures.
(c) The Company shall have an ongoing employee training program to ensure staff is adequately trained in KYC and AML procedures.
- 10. Review of KYC for the Existing Accounts:
(a) The Company shall apply this policy to existing customers on the basis of materiality and risk, continuously monitoring transactions for unusual patterns.
(b) The Company may impose monetary limits based on account type and nature. If a customer does not furnish required information, the Company may close the account.
(d) Periodic updates shall occur at least once in every 2 years for high-risk customers, once in every 8 years for medium-risk, and once in every 10 years for low-risk. Physical presence at the time of periodic updating for low-risk customers shall not be insisted upon unless there is a change in their status.
- 11. Appointment of Principal Officer:
The Company has appointed a senior management officer designated as the Principal Officer. The Principal Officer is responsible for monitoring and reporting of transactions and sharing information as required by law. The Principal Officer shall maintain close liaison with enforcement agencies and the Company in fighting money laundering and combating financing of terrorism.
- 12. Record Management:
(1) Maintain records of transactions between the Company and the customer for at least 5 years.
(2) Preserve identification records for at least 5 years after the business relationship ends.
(3) Make records available to competent authorities upon request.
(4) Maintain proper record of suspicious transactions under PML Rules.
(5) Maintain detailed information to permit reconstruction of individual transactions.
(6) Evolve a system for proper maintenance and quick retrieval of data.
(7) Maintain records in hard or soft format. The Company shall upload the KYC data of new individual accounts opened on or after April 1, 2017, with CERSAI as required under the Prevention of Money Laundering Rules.
