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Anti Money Laundering Manual
Khalifa-Trade follow stringent rules in regards to money laundering with all clients, and potential clients. If any activity is found to be suspicious the Compliance Manager will execute a formal enquiry and report any findings to the necessary parties. If the suspicious activity is confirmed as money laundering the account of the guilty party will be terminated and all existing contracts will be considered null and void.
The official employed by Khalifa-Trade, as the Compliance Manager is accountable for any purposeful areas where money-laundering doings may take place. All employees of Khalifa-Trade must swiftly report any untoward goings-on, and express any questions regarding Khalifa-Trade policies and procedures, to the Compliance Manager. As part of Khalifa-Trade’ pledge to fulfill with anti-money laundering activities, Khalifa-Trade employees with the possibility to identify money laundering activities will participate in training on the firm's policies and procedures.
If there is an occurrence that an employee of Khalifa-Trade is insubordinate in abiding by the rules and regulations, action will be taken within the discretion of the Compliance Manager and Senior Management. A breach of the Anti Money Laundering requirements by a member of staff will result in an immediate reprimand ranging from a verbal warning up to termination of employment.
Untrustworthy activity can be identified at any time throughout a client's relationship with Khalifa-Trade. Certain client conduct when communicating and corresponding with a client can be indicative of intent to use the account for money laundering activities. . If any employee of Khalifa-Trade becomes conscious of any example of distrustful goings-on, the Head of compliance must be informed.
The following are examples of doubtful activities during the client solicitation process that may be indicative of money laundering and must be immediately reported to the Compliance Manager:
- The client attempts to use bribery, coercion or any other improper action to open an account or conduct a transaction;
- The client exhibits unusual concern for secrecy, particularly with respect to his/her identity or background;
- The client exhibits abnormal unease regarding government exposure requirements, predominantly with reverence to his or her identity, type of business, and assets;
- Upon demand, the client refuses to recognize or fails to point toward a genuine foundation for his/her funds and other assets or identifies a foundation that is fabricated, artificial, ambiguous or significantly inaccurate;
- The client is unwilling to make available total information concerning the reason of his/her business, previous banking relationships, an entity's officers and directors or location if asked;
- The client has difficulty describing the nature of his/her business;
- The client lacks general knowledge of his/her industry;
- For no apparent reason, the client desires numerous accounts under a single name or numerous names;
A transaction is considered "doubtful" and ought to be reported if it involves, in aggregate, at least $7,500 in funds or other assets and if Khalifa-Trade rationally suspects, taking all acknowledged information into consideration, that the funds were a derivative from unlawful actions, or that the transaction(s) is anticipated to conceal or cover the unlawful resource of funds. In particular, doubtful transactions or sequence of transactions that must be reported consist of (i) transactions that seek to conceal the possession, character, foundation, place or management of assets; (ii) transaction(s) intended to avoid the currency transaction reporting requirements;(iii) transactions that attempt to use the firm to facilitate a criminal transaction; and (iv) a transaction that has no business or apparent lawful purpose, or that is not the sort in which the client normally would be expected to engage. However, suspicious activity need not satisfy the above $7,500 threshold in order to be subject to reporting. Therefore, employees should report any pattern of suspicious activity, even if such pattern does not meet the $7,500 threshold noted above. The Compliance Manager also must be informed of any instance of doubtful conduct.
Should any employee receive a request or subpoena from any financial institution, government agency, self regulatory authority, or law enforcement agency to provide information regarding a past, current or prospective client, and such a request must be forwarded to the Compliance Manager immediately. In addition, Khalifa-Trade will fully assist with all applicable regulatory, self-regulatory, governmental and law enforcement authorities with respect to maintaining compliance with anti-money laundering laws and regulations. The Compliance Manager shall act as the chief contact in any matters dealing with the law. Only the Compliance Manager is allowed to divulge information regarding client accounts to third parties. Khalifa-Trade shall respond timely to all requests from appropriate legal authorities for information associated to anti money laundering compliance or any client account. The Compliance Manager shall make accessible to such legal authority information and account documentation for any account introduced or controlled by Khalifa-Trade.
All information reported by any employee concerning doubtful goings-on will be held in the strictest confidence by Khalifa-Trade and not disclosed to any client. All Suspicious Activity Reports are confidential. In addition, it is an infringement to disclose to the client involved, or any third party (other than law enforcement agencies or regulators), that Khalifa-Trade has filed a Suspicious Activity Report.
Maintenance of records
Khalifa-Trade shall uphold an efficient system of records to keep their organization constantly knowledgeable of client activities and circumstances. A record of each new account application and supporting documents shall be upheld. Any proceedings obtained shall be maintained for a period of 5 years after the clients' account is closed. Particularly, the retained records may comprise, without limitation, various documents provided by, or fulfilled by, the client during the life of the account, communication between Khalifa-Trade and the client, and any Suspicious Activity filed and all documentation supporting such Suspicious Activity Report. All communication and sustaining documentation concerning to a precise report will be saved in an individual file.
Destination of Funds Request
Khalifa-Trade have access to a record of its client’s account opening accounts. Khalifa-Trade monitors’ cash flow activity on all its client accounts. Khalifa-Trade may have information that would allow it to settle on the source or intention of funds or whether any deposits or transfers were unusual. In the event that Khalifa-Trade received such requests, Khalifa-Trade has instituted the following procedures to respond to such requests.
1. All requests will be forwarded to the Compliance Manager for response.
2. Upon receipt of the requests, the Compliance Manager will immediately begin a review against Khalifa-Tradet's databases for any positive matches.
3. Pursuant to applicable regulation, the Compliance Manager will make every effort to fully abide to the rules of completion in their searches against all of Khalifa-Trade's databases and respond as soon as practically possible.
4. If Khalifa-Trade establish a match for a named person, Khalifa-Trade will take action that it has a clear match and offer information for the requesting legal authority to follow up with an Khalifa-Trade official.
5. The Compliance Manager will uphold a written record of all needs, the date reviewed and the results of Khalifa-Trade’ database review.
AML Program Requirements
Know Your Customer (KYC)
Identifying High Risk Accounts
Obtaining Client Information
Senior Foreign Government/Public Officials
Accepted Forms of Deposits
Suspicious Activity Monitoring and Reporting
Maintenance of Records
Relationships between Khalifa-Trade and Foreign Financial Institution Clients
Audit of Khalifa-Trade’s AML Policies and Procedures
Deposit and withdrawal requirements
Know Your Customer
To assist the battle against the funding of terrorism and money laundering activities Khalifa-Trade will acquire and record information that identifies each person who opens an account. Therefore, in order to identify, discourage and avoid money laundering and other doubtful activities, it is very important that Khalifa-Trade "know" all of its clients - both corporate and individual. To attain adequate information about each client, Khalifa-Trade will assume the steps set forth below to obtain and uphold thorough client information. This risk-based approach begins at the initial contact between the client and Khalifa-Trade and continues during the course of the business relationship with the client. All employees of Khalifa-Trade are required to comply with the "Know Your Customer" policies and procedures set forth below and to otherwise uphold against money laundering activities in the act of their everyday duties. Khalifa-Trade shall conduct appropriate due diligence to know and adequately document the identity of each prospective new client, the nature of the client business (employment) and the source of the client assets, before opening an account for the client, keep proper records of such due diligence and the client’s transactions, report and maintain record of any suspicious activities as required by these Policies and applicable law, and participate in Khalifa-Trade sponsored educational courses and training.
Each client must provide personal information during his registration. He has to send the following documents:
- A clear photocopy of his ID card or driving license where the photo is clearly seen, or the first page of his local or international passport with same requirement above and the signature are clearly seen.
- A proof of address. This can be a utility bill (not older than 3 months) or bank statement.
When the applicant is a company where none of its principal directors or shareholders already has an account with Khalifa-Trade, the official needs to provide the following documents according to the KYC policy:
- A description of the nature of business.
- A clear photocopy of certificate of incorporation.
- An extract from the Commercial Register, evidencing the registration of corporate acts and amendments.
- Names and addresses of directors and beneficial owner of the corporate entity.
- A clear photocopy of Articles of Association and Memorandum of the company.
- A proof of the registered company’s address and the shareholders and directors.
In any case where the documents are written in a different language than English, a notarized translation needs to be provided.
Obtaining Client Information
All prospective clients of Khalifa-Trade will be required to provide basic information prior to the opening of any account by completing, in full new account documentation and forwarding any required supporting documents. Additional due diligence may be necessary depending on the exact situation, including the type of clients, the client's home jurisdiction, and how well Khalifa-Trade already knows the client or account applicant. Additional due diligence may include, for example, taking steps to ensure that the client, or the source of the funds, is legitimate. On a case by case basis, requirements may be personalized for a forthcoming new client, if approved by Compliance or Management, with appropriate notes made on the account.
On opening an account with Khalifa-Trade, clients are required to submit a copy of a valid government issued identification with photo. The identifying documents of prospective clients shall be reviewed and compared with other forms of identifying documentation provided by the client. If during the course of the verification process, Khalifa-Trade identifies a discrepancy or missing information in a prospective client’s application, Khalifa-Trade will advise the client of such deficiency and request additional information or documentation to comply with Compliance department requirements. If the potential client fails to provide such additional identifying documentation requested and there is no ruling of such insufficiency, Khalifa-Trade will refuse the application and not open the account and, if appropriate based upon the procedures and policies below:
All new clients of Khalifa-Trade, by completing Khalifa-Trade’s new account documentation, must provide the following information and documentation (unless otherwise verified through non-documentary means):
- Information Requested From Clients:
- The identity and address of the client (Post Office boxes are not acceptable unless accompanied by appropriate documentation);
- Date of birth;
- Citizenship status (e.g., citizen, resident alien with nationality, non-resident alien);
- Identification number;
- Source of the funds
- The full name and address of the entity (Post Office boxes are not permitted unless accompanied by appropriate documentation);
- Photographic Identification of Client
- Present list of authorized signatories or copies of powers of attorney to establish and document that the entity's representative(s) are authorized to act on the entity's behalf.
- Khalifa-Trade will not accept accounts when the account controller’s identity cannot be adequately confirmed after using documentary and/or non-documentary methods.
All clients will be informed in the Trading Agreement that Khalifa-Trade are requesting this information to clarify the client’s identity. All of the above information and documentation (unless otherwise verified through non documentary means) shall be obtained by an ecn official, attached to the account application documentation and provided to Khalifa-Trade for processing pursuant to Khalifa-Trade’s normal new account approval process. In addition, whenever a material alteration is made to an existing account, the Khalifa-Trade official may request copies of suitable documentation to update and approve Khalifa-Trade’s records as to the client and must supply such documentation for dispensation. Authentication Through Non-Documentary Records - Approved use of non-documentary methods of client identification and verification for accounts is acceptable when a client who is a natural person cannot present an unexpired, government issued identification document that bears a photo or similar safeguard; Khalifa-Trade is accessible with different documents to confirm the identity of the client; or Khalifa-Trade does not attain documents to validate the identity of the client, does not meet face to face with the client who is a natural person, or is otherwise presented with circumstances that increase the risk for Khalifa-Trade will be unable to verify the true identity of a client through documentary methods. Although documentation may be collected by Khalifa-Trade or the referring entity, ultimately Khalifa-Trade must obtain possession of the documentation prior to opening an account.
The methods Khalifa-Trade may utilize in performing identity confirmation through non-documentary methods include:
(1) contacting a client; (2) independently verifying the client’s identity through the comparison of information provided by the client with information obtained from a consumer reporting agency, public database or other reliable source; (3) checking references with other financial institutions; and (4) obtaining a financial statement from the client, or other reasonably reliable document or source. Under no circumstances Khalifa-Trade will create an anonymous account to the client. Also will not be supported the creation of an account under a false name.
Identifying high risk accounts
If a client account is located in a known restricted, high risk or non-cooperative jurisdiction ("NCCT") the evaluation of the compliance department will be necessary to establish if the client can be accepted. If a client account is implicated in a high risk business, Khalifa-Trade shall establish what, if any, additional due diligence efforts are required previous to accepting the account, and if accepted, Khalifa-Trade shall establish if any additional monitoring of account activity is necessary.
Suspicious Activity Reporting
- Account Opening
- Suspicious activity can be detected at any time during a client's relationship with Khalifa-Trade. Certain client conduct during the account opening process may be indicative of intention to use the account for money laundering activities.
The following are examples of suspicious activities during the account opening process that may be indicative of money laundering and must be without delay reported to Management or the Compliance department:
- The client, or a beneficial owner of the client, appears on a list of sanctioned individuals or entities as maintained by the legal authorities;
- The client attempts to use corruption, compulsion or any other indecent action to open an account or carry out a transaction;
- The client exhibits extraordinary apprehension for secrecy, predominantly with respect to his/her identity and status, or declines to complete, in its entirety, Khalifa-Trade’ account documentation;
- The client exhibits abnormal worry concerning Khalifa-Trade’ compliance with government reporting requirements, particularly with respect to his or her identity, type of business, and assets;
- The client is reluctant to provide complete information regarding the purpose of his/her business, prior banking relationships, an entity's officers and directors or location if asked;
- The clients have difficulty describing the nature of his/her business;
- The clients lack general knowledge of his/her industry;
- The clients present unusual or suspicious identification documents that cannot be readily verified;
- For no noticeable reason, the clients request numerous accounts under a single name or multiple names;
- The clients is from, or maintains accounts in, a country identified as a haven for money laundering; or
- The clients or a person associated with the clients, has a questionable background (including prior criminal convictions) or is the subject of news reports indicating possible criminal, civil or regulatory violations.
(b) Keeping track of Accounts
The Compliance Manager will oversee clients transactions from time to time, based on deposit and withdrawal activity, with respect to any questionable practice, high-risk characteristic or doubtful activity.
Account activities subject to keeping track of, include, but are not restricted to, the trading and flow of money into and out of an account, the types, amount and occurrence of different financial instruments deposited into and withdrawn from the account and the origin and destination of wire transfers.
With respect to any of the following types of accounts, the Compliance Manager shall establish, at the time the account is approved, the appropriate level and frequency of review of account activity, and shall keep track of the account accordingly based on such fortitude:
• An account held by a senior foreign government official or the close family member or relation of such a body.
The Compliance Manager may change the monitoring Level for any given account based upon continued account activity.
A constant review of accounts will be performed to ascertain if the client has been added to the Office of Foreign Assets Control List or other sanctions, regulatory enforcement, law enforcement and Politically Exposed Persons lists.
Khalifa-Trade will perform random reviews of clients holding White Label agreements held at Khalifa-Trade. These reviews will be performed by the Compliance Department and should take note that any activity that may appear abnormal or doubtful. The Compliance team will notify the Compliance Manager in case of any abnormal or precise activity is identified. The Compliance Department will then carry out any additional investigation and inquiry that may be necessary.
(c) Continuing Account Activity
The subsequent are activities that may arise during the business relationship with the client and are examples of doubtful activities or uniqueness that may involve reporting to the Compliance Department.
- A client account has inexplicable or sudden widespread electronic transfers, in particular in accounts that had little or no prior goings-on;
- A client requests several cash withdrawals from Khalifa-Trade;
- A client's account has a considerably large amount of electronic transfers to or from third parties.
- A client's account has electronic transfers from unusual locations in particular in countries that are known for their high money laundering activity.
- The information provided by the client that identifies a legitimate source for funds is fabricated, fake, deceptive or considerably incorrect;
- A client requests that a transaction be processed in such a manner so as to avoid Khalifa-Trade normal documentation requirements;
- A client exhibits a total lack of concern regarding risks, commissions, or other transaction costs;
- A client's account indicates large or frequent electronic transfers, and thereafter immediately requesting withdrawals.
If Khalifa-Trade reasonably suspects, taking all known facts into deliberation, that the funds were resultant from unlawful activities, or that the transaction(s) is intended to hide or disguise the illegal source of funds. In particular, suspicious transactions or series of transactions that must be reported include (i) transactions that seek to hide the ownership, nature, source, location or control of assets; (ii) transaction(s) designed to evade the currency transaction reporting requirements;(iii) transactions that attempt to use the firm to facilitate a criminal transaction; and (iv) a transaction that has no business or apparent lawful purpose, or that is not the sort in which the client in general would be likely to take on, particularly where Khalifa-Trade has no reasonable clarification for the transaction. Therefore, Khalifa-Trade employees should report any pattern of doubtful activity. The Compliance Department also must be informed of any instance of the receipt of an order for a reportable transaction whether or not the client goes through with the transaction. The Compliance Department will file a Suspicious Activity Report after Khalifa-Trade becomes aware of a doubtful transaction.
Maintenance of Records
Khalifa-Trade require that all members of staff preserve a proficient system of records and reports to keep management constantly informed of clients' activities and conditions. Khalifa-Trade may require internal and external audits to verify and supplement the members of staff records and reports. Khalifa-Trade do not allow the modification of Khalifa-Trade records for the reason of escaping Khalifa-Trade policies and procedures.
A record of the evidence of each client's identity and of all the transactions carried out by each client shall be maintained at one of its office locations. Specifically, the retained records shall include, without limitation, the documentation provided by, or completed by, the client at the account opening, the non-documentary verification methods or additional methods used to verify identity and the results, the documentation relating to the resolution of all substantive discrepancies noted when verifying the identification information, the details (the nature of transaction, amount, date, parties, facilities and name of employee) of all transactions carried out by that client, and any Suspicious Activity Report filed by Khalifa-Trade and all documentation behind such Suspicious Activity Report.Khalifa-Trade will preserve records as to client identification and monitoring at a readily accessible location for the first 2 years after each account opening, and thereafter, such records shall be maintained for a period of 5 years after such account is closed. Khalifa-Trade will maintain records of any Suspicious Activity Reporting filing with sustaining documentation for a period of 5 years after such filing. Khalifa-Trade shall keep a record of all correspondence and supporting documentation relating to a specific Suspicious Activity Reporting in a separate file. The files will be maintained separately and electronically on the Company’s data system Client Relationship Management.
Should any member of staff receive a request from any financial institution, government agency, self regulatory authority, or law enforcement agency to provide information regarding a past, current or prospective Khalifa-Trade client, such request must be forwarded to the Compliance Department without delay. Additionally, Khalifa-Trade will fully cooperate with all applicable regulatory, self-regulatory, governmental and law enforcement authorities with respect to Khalifa-Trade’s compliance with anti-money laundering laws and regulations. The Compliance Department shall act as the primary Khalifa-Trade contact in any matters dealing with the government authorities. Similarly, any person who has been requested to divulge a Suspicious Activity Report or the information contained in a Suspicious Activity Report must decline to produce the Suspicious Activity Report and must notify the Compliance Manager. Only the Compliance Departments are allowed to divulge information regarding client accounts to third parties outside of Khalifa-Trade. Khalifa-Trade shall respond swiftly to all requests from appropriate authorities for information related to anti-money laundering compliance or any client account. The Compliance Department shall make available to such agency information and account documentation for any account opened, maintained, administered or managed by Khalifa-Trade. Ultimately, Khalifa-Trade shall effect any action requested by the Governmental Authorities, including, but not limited to, the termination of an account or the monitoring of activities in an account. Aforementioned to complying with any request for Suspicious Activity Reporting sustaining documentation, Khalifa-Trade will confirm the legitimacy of the authority requesting the release of such information. Confirmation of the request will be attained by contacting the regulatory agency whom requested the information. The Compliance Department shall obtain a written request from any law enforcement agency which requests the firm to keep an account open with suspicious activity. Khalifa-Trade will preserve a copy of the official request for a period of five years after the request has expired.
All information reported by any employee regarding a suspicious activity will be held in the strictest confidence by Khalifa-Trade and not disclosed to any client. All Suspicious Activity Reports are confidential. Furthermore, it is a violation to disclose to the client involved, or any third party outside of Khalifa-Trade (other than law enforcement agencies or regulators), that Khalifa-Trade have filed a Suspicious Activity Report.
Deposit and withdrawal requirements
- When depositing via credit card or a wired transfer, the name signed on the card or the name of the bank account’s owner, must match the registered one in the transaction.
- Withdrawing funds from the trading account via method different from the deposit method is possible, only after withdrawing the sum that equals the sum of the client’s deposits via the same method.
- In case the deposit method does not support a withdrawal, then the funds may be withdrawn as a wired transfer to the client or other way may be used as agreed with the company, and the company must be able to prove that the account funded belongs to the client.
- In case the client deposited through various PSPs, the sum of the withdrawals shall be made relatively to the sum of the deposits in each PSP.
- If the client had deposited via credit cards, wired transfers and e-payments, then any withdrawals funds that exceed his deposits is possible via any of the methods mentioned. Otherwise, it is possible to be made via any available method, by the client’s choice.