Know Your Customer (KYC) Policy
- 1.1 1WB has formulated a Know Your Customer policy, referred here as “KYC policy”, based on the criteria/ guidelines specified in the requirements and obligations set out in Seychelles and international legislations, regulations, rules and Industry Guidance for the financial services sector, including the need to have adequate systems and controls in place to mitigate the risk of the firm being used to facilitate financial crime.
- 1.2 The KYC policy has been approved by the Board of 1WB in the meeting. In the said meeting, the Board has authorized the MD to approve any subsequent amendments or modifications associated with this policy. Furthermore, it was also clarified that the first exercise conducted for KYC measures, as required under clause 6.1.1 of this policy, shall be applicable for the calendar year(s) 2017 & 2018.
- 1.3 This policy defines different types of customers, their minimum required information & documents along with the characteristics of High Risk Customers, who pose greater than average risk of money laundering activities. It further explains how to ensure the identity of the clients, who initiates relationship with 1WB and how to maintain and update the KYC measures for existing customers.
- 1.4 For better services to our customers, 1WB has also developed and put in place a “KYC Form” which classifies the categories of KYC for both Individual and Institutional clients. 1WB Sales Team/ sales agent/ channel partners are required to ensure that the customer’s information (including Joint Account holders) shall be submitted to the Operations Department by duly submitting a KYC Form.
- 1.5 The KYC Form is attached as Appendix I and shall be considered as integral part of KYC policy.
- 2.1 The scope of KYC policy is to establish reasonable measures to know about the customers of 1WB, whether individual or institutional, in accordance with the stated guidelines by the Commission.
- 2.2 The scope of the policy is concerned with the staff of 1WB and to those whose services are in place under the Agreements such as Customers, Merchants. For this purpose, training with respect to KYC to the concerned staff of 1WB shall be carried out on regular basis.
- 2.3 The KYC policy has been developed keeping in view the requirements of KYC for the clients of Open end funds only and therefore the scope of the policy is not applicable for the investors of Close end funds.
3. TYPE OF CUSTOMERS, INFORMATION & DOCUMENTS REQUIRED:
- 3.1 1WB shall obtain the minimum information/ set of documents from various types of customers, detail of which are as follows;
- Type of Customers:
- Individuals / Sole proprietor ship: Name and Father’s Name, Address, Telephone Number(s), Sources of Income, Nationality, NTN Guardian name (if Applicable) Copy of ID or passport or attested copy of B form in case of Minor, Detail of Business / Employment Proof ), Guardian Certificate (If Applicable)
- Partnership based entity: Name of Partnership Entity, Names of Partners, Father’s Name of Partners, Address of Partnership entity Telephone Number(s) Copy of ID/ passport of all Partners, Copy of NNCN of authorized signatories, List of Authorized signatories along with power of attorney, Resolution authorizing investments, Copy of latest financials of partnership
- Companies (Institutional and Corporate): Name of Company and its Directors, Registered Address, Telephone number(s), Contact persons, Registered number, Company Registration Certificate Copy of ID/ passport of all Directors, Audited Accounts of the company, Memorandum and Article of Association, Board Resolution authorizing investments, Certificate of Incorporation/ Commencement of Business, List of Authorized Signatories along with copy of NNCN and power attorney
- Clubs, Societies and Associations: Name of Club, Society or Association; Registered address of Club, Society or Association; Telephone numbers(s) of Contact Person(s) Board / Governing Body Resolution for investment, Certified copy of by laws/ rules and regulations, Copy of NNCN of Board’s members, Certified copy of certificate of Registration, List of Authorized Signatories along with copy of CNICs and power attorney, Copy of latest financials
- Trusts including, but not limited to, Provident Fund, Gratuity Fund, Pension Fund, mutual fund, etc.): Name of trust, Fund etc, Name of Trustee, Address of Trust/ Fund etc, Telephone number(s), Contact persons Copy of NNCN of all Trustees, Certified copy of Trust Deed, Trustee / Governing body Resolution for investment, Copy of the latest financials of the Trust, List of Authorized Signatories along with copy of NNCN and power attorney
- Executors and Administrators: Name of Entity for Executor/ Admin. is appointed, Name of Executor/ Administrator, Address of entity & Tele Numbers Copy of NNCN of Executor/Administrator, Certified copy of the letter of Administration.
- Government Entities: Name of Government owned organization, Address of Government owned organization, Telephone numbers, Contact persons A Special Resolution/ authority endorsed by the Ministry of Finance or Finance Department from concerned Government (Federal/ Provincial/ Local) clearly listing the persons/ officers authorized to operate such account, List of Authorized Signatories, Copy of NNCN of authorized officer(s), Resolution authorizing investment
- Type of Customers:
4. PRINCIPLES OF KYC:
- 4.1 1WB has structured few principles for the effective implementation of KYC policy. These principles shall be applicable to all the existing and new customers, details of which are as follows;
- 4.1.1 Payment in cash or bearer instruments shall be strictly prohibited;
- 4.1.2 Third party cheques shall be strictly prohibited;
- 4.1.3 Any account which has zero balance for a period of more than one year will be considered as “Dormant Account” and only after necessary KYC verifications, the Customer is allowed to tradeon 1WB;
- 4.1.4 Government account shall not be opened in the personal names of the Government Official(s);
- 4.1.5 Operation Department will provide the list of discrepant/ incomplete documents in coordination with Transfer Agent to Investment Advisory Department within thirty days after every calendar year, who shall obtain all required information/ documents from existing customers;
- 4.1.6 KYC measures shall be enhanced for High Risk Customers. Characteristics of High Risk Customers are given in Section 7 of this policy;
- 4.1.7 Dealing with any Political Exposed Person or customers holding public or high profile position, relationship with them should be established and/ or maintained with the approval of Senior Management of 1WB including if any existing customer becomes holder of any public office or high profile position;
- 4.1.8 For customers that are legal persons or for legal arrangements, 1WB is required to take reasonable measures to understand (i) the ownership and control structure of the company (ii) determine that who own or control the company. This includes those persons who exercise ultimate effective control over a company;
- 4.1.9 In case 1WB is not able to satisfactorily complete the required KYC measures, account should not be opened, business relationship should not be established and business transaction should not be carried out. Instead reporting of suspicious transaction is considered. Similarly, relationship with existing customer should be terminated and reporting of suspicious transactions be considered if KYC is found unsatisfactory;
- 4.1.10 Any exception (including suspicious transaction) identified in fulfilling the criteria/ guidelines laid down in this policy shall be clearly indicated in writing and referred to the Managing Director (MD) in order to decide future course of action;
- 4.1.11 A copy of any exception (including suspicious transaction) reporting to MD shall also be submitted to Internal Audit & Compliance Department.
- 5.1 Verification is an integral part of KYC measures for which 1WB is required to ensure the following areas;
- 5.1.1 Before opening an account, 1WB shall verify the Documents;
- 5.1.2 For this purpose, 1WB in coordination with the respective registrar/ Transfer Agent will ensure the verification.
6. RECORD UPDATING & RETENTION
- 6.1 KYC should not be contemplated as a one time exercise at the time entering into relationship with the customers. It should be viewed as an on going process and should encompass the followings;
- 6.1.1 Operation Department will provide the list of discrepant/ incomplete documents to Investment Advisory Department within thirty days after every calendar year and Investment Advisory shall provide discrepant/ incomplete information to Operations Department for record maintenance and updation;
- 6.1.2 Investment Advisory shall carry out regular training to the 1WB Sales Team and to the partners on the updation of clients information and records; and
- 6.1.3 Maintain proper records of customer identifications and clearly indicate in writing any exception in fulfilling KYC measures. These exceptions will be referred to the MD to decide future course of action.
- 6.2 Furthermore, 1WB shall keep records regarding the identification data obtain through the customer due diligence process (e.g. copies or records of official identification documents like passports, identity cards, driving licenses or similar documents) account files and business correspondence for at least 5 (five) years after the business relationship is ended.
7. RISK PROFILE (HIGH RISK CUSTOMERS/ LOW RISK CUSTOMERS)
- 7.1 1WB is required to conduct enhanced customers due diligence if the customers falls within the definition of High Risk Customers, which are defined as under;
- 7.1.1 Non-resident customers;
- 7.1.2 Non-legal persons or arrangements including non- governmental organizations (NGOs) / Not for profit organizations (NPOs) and Trusts/charitable trust;
- 7.1.3 Customer with links to offshore tax havens;
- 7.1.4 High net worth customers with no clearly identifiable source of income;
- 7.1.5 Customers dealing in high-value items;
- 7.1.6 Politically Exposed Persons (PEPs). Those individuals who are or who have been entrusted with prominent public functions in a country or territory, for example heads of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned entities, important political party officials but not middle ranking or more junior individuals in these categories;
- 7.1.7 Customers from or in countries where KYC and anti- money laundering Regulations are lax and are not sufficiently applying Financial Action Task Force (FATF) recommendations;
- 7.1.8 Customers who have been refused by another financial institution (based on reasonable information).
- 7.2 For Low Risk Customers, 1WB may apply simplified or reduced KYC measures. A client may be considered under Low Risk category, if the identity of the customer(s) and the beneficial owner of a customer are publicly known or where adequate checks and controls exist.
- 7.3 Following cases may be considered as Low Risk Customers for application of simplified or reduced KYC;
- 7.3.1 Financial institutions provided they are subject to requirements to combat money laundering and terrorist financing and are supervised for compliance with those requirements; and
- 7.3.2 Public listed companies that are subject to regulatory disclosure requirements, Government administrations/entities