This AML & KYC Policy outlines the measures implemented by KapitalIQ (hereinafter referred to as the “Company”) to prevent money laundering, terrorist financing, and ensure compliance with Know Your Customer (KYC) regulations. By engaging with the Company’s services, clients (hereinafter referred to as the “Client”) agree to adhere to the principles outlined in this policy.
Anti-Money Laundering (AML) Policy
1. Compliance with Regulations
The Company strictly adheres to all applicable international, regional, and local Anti-Money Laundering (AML) regulations. This includes ensuring that its processes, policies, and operational framework are regularly reviewed to maintain alignment with global standards such as those outlined by the Financial Action Task Force (FATF). The Company actively participates in AML initiatives, collaborates with regulatory authorities, and ensures its practices meet the stringent criteria established by governing bodies. By complying with these regulations, the Company aims to safeguard the integrity of its platform and financial systems.
2. Risk-Based Approach
KapitalIQ adopts a comprehensive risk-based approach to identify, evaluate, and mitigate risks associated with money laundering. This involves segmenting clients and transactions into varying risk categories based on predefined criteria such as geographic location, transaction volume, and account activity patterns. High-risk clients undergo enhanced scrutiny, and their activities are closely monitored to prevent abuse of the platform. The risk assessment framework is dynamic, allowing the Company to adjust measures as risks evolve.
3. Transaction Monitoring
The Company employs advanced transaction monitoring systems that analyze client activities in real-time. These systems utilize algorithms to detect patterns, inconsistencies, or red flags that may indicate potential money laundering. Additionally, manual reviews are conducted by trained analysts for further investigation. The monitoring process involves the scrutiny of deposit sources, withdrawal destinations, and transaction behaviors to ensure compliance with AML standards.
4. Reporting Suspicious Activity
KapitalIQ ensures that all suspicious activities or transactions are promptly reported to the appropriate Financial Intelligence Units (FIUs) or regulatory authorities. Suspicious Activity Reports (SARs) are filed in a timely manner, containing detailed information about the nature of the activity, client identity, and supporting evidence. The Company’s employees are trained to identify suspicious behaviors and escalate concerns efficiently.
5. Record-Keeping
The Company maintains comprehensive records of all transactions, client activities, and identification documents for a minimum of five years or longer if mandated by law. These records include copies of identification, transaction logs, communication records, and other pertinent information. The meticulous maintenance of these records ensures traceability and supports investigations into suspicious activities when required.
6. Training Programs
Employees of KapitalIQ undergo regular training sessions on AML compliance to stay updated on emerging risks, regulatory changes, and best practices. The training covers topics such as recognizing suspicious activity, understanding AML regulations, and effectively utilizing monitoring tools. The Company’s commitment to ongoing education ensures that its personnel remain vigilant and proactive in preventing financial crimes.
7. Client Identification
During the onboarding process, the Company rigorously verifies the identity of all clients. This includes the collection and validation of government-issued identification documents, proof of address, and other supporting materials. The Company ensures that all identification processes align with industry standards to prevent unauthorized or fraudulent access to its platform.
8. Enhanced Due Diligence (EDD)
High-risk clients, such as Politically Exposed Persons (PEPs) or individuals from high-risk jurisdictions, are subjected to Enhanced Due Diligence (EDD). This involves obtaining additional documentation, conducting in-depth background checks, and closely monitoring account activities. EDD ensures that the Company can mitigate risks associated with such clients.
9. Prohibited Transactions
KapitalIQ prohibits
transactions involving entities or individuals listed on sanctions or watchlists issued by regulatory bodies. This includes activities related to terrorism financing, drug trafficking, arms dealing, or other illicit ventures. The Company’s systems are designed to automatically block such transactions.
10. Regular Audits
The Company conducts regular internal and external audits of its AML policies and systems to ensure compliance and effectiveness. These audits help identify gaps, improve processes, and maintain a robust compliance framework.
11. Sanction Screening
All clients and transactions are screened against global sanctions lists, including those maintained by the United Nations, Office of Foreign Assets Control (OFAC), and other international bodies. This ensures that the Company does not engage with prohibited individuals or entities.
12. Currency Transaction Reporting (CTR)
KapitalIQ complies with legal requirements to report large cash transactions or those structured to avoid reporting thresholds. These reports are submitted to the relevant authorities in accordance with applicable laws.
13. Monitoring Correspondent Banking Relationships
The Company monitors its relationships with correspondent banks to ensure they are not being misused for money laundering. This involves conducting due diligence on partner institutions and reviewing their AML practices.
14. Termination of Relationships
The Company reserves the right to terminate relationships with clients found to be engaging in illicit activities or failing to comply with AML requirements. Such decisions are made to protect the platform’s integrity and comply with legal obligations.
15. Cooperation with Authorities
KapitalIQ fully cooperates with law enforcement and regulatory authorities in their efforts to investigate and prosecute financial crimes. The Company provides necessary records, reports, and support to facilitate these investigations.
Know Your Customer (KYC) Policy
1. Client Identification Procedures (CIP)
KapitalIQ requires all clients to submit valid government-issued identification documents during the registration process. This includes passports, national ID cards, or driver’s licenses. The verification process involves cross-checking the submitted details against official databases and conducting facial recognition checks where applicable.
2. Verification of Address
Clients must provide proof of residential address through documents such as utility bills, bank statements, or government correspondence. These documents must be recent and clearly display the client’s name and address. Address verification ensures that the Company can accurately determine the client’s jurisdiction.
3. Risk Assessment
The Company categorizes clients into risk tiers based on factors such as geographic location, occupation, and transaction behavior. High-risk clients are subjected to additional scrutiny, while low-risk clients undergo standard due diligence measures. This segmentation allows the Company to allocate resources effectively.
4. Ongoing Monitoring
KapitalIQ continuously monitors client accounts to detect changes in behavior or activity patterns that may indicate potential risks. Ongoing monitoring includes regular reviews of transaction histories, updated documentation, and risk reassessments.
5. Politically Exposed Persons (PEPs)
Enhanced measures are implemented for clients identified as Politically Exposed Persons (PEPs). This includes detailed background checks, monitoring of transactions, and obtaining senior management approval for account opening. These measures mitigate risks associated with corruption and financial crimes.
6. Beneficial Ownership
For corporate accounts, the Company identifies and verifies the Ultimate Beneficial Owners (UBOs) to ensure transparency. Clients are required to disclose ownership structures and provide documentation supporting their claims.
7. Source of Funds Verification
Clients must provide detailed information about the source of funds used for transactions. This includes salary slips, business earnings records, or other evidence demonstrating the legitimacy of funds.
8. Account Freezing
The Company reserves the right to freeze accounts displaying suspicious activities or failing to provide required documentation. Frozen accounts remain inactive until the client’s identity or activities are fully verified.
9. Periodic Updates
Clients are required to periodically update their identification and contact information to ensure compliance with evolving regulatory standards. Notifications are sent to clients prompting timely updates.
10. Prohibited Clients
KapitalIQ does not engage with clients from jurisdictions with inadequate KYC standards or those involved in activities contrary to regulatory guidelines. Such clients are promptly declined or flagged for review.
11. Third-Party Verification
To ensure authenticity, the Company leverages third-party verification services to cross-check client-provided information. These services enhance the reliability of the KYC process.
12. Consent for Data Usage
Clients provide explicit consent for the use of their data for verification, compliance, and record-keeping purposes. Data usage is governed by the Company’s Privacy Policy, ensuring transparency and security.
13. Record Maintenance
All KYC records are securely stored for at least five years, enabling compliance with regulatory requirements and supporting investigations when necessary. Records include identification documents, account activity logs, and correspondence.
14. Fraud Prevention
The KYC process is integral to detecting and preventing fraudulent activities, including identity theft and unauthorized access. Robust verification measures are implemented to safeguard the platform and its clients.
15. Client Education
KapitalIQ provides educational resources to inform clients about the importance of KYC procedures. By understanding their role in compliance, clients contribute to maintaining the integrity of the financial system.
By using KapitalIQ’s services, the Client acknowledges that they have read, understood, and agreed to comply with the terms outlined in this AML & KYC Policy.