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Anti-Money Laundering (AML) Policy

SEBI Registered Investment Adviser — Reg. No. INA000018975

Effective: 15 Oct 2019 (as per SEBI Master Circular) • Last updated: 31 May 2025

1) Purpose & Legal Basis

This Anti-Money Laundering (AML) Policy (“Policy”) is prepared in accordance with the Prevention of Money Laundering Act, 2002 (PMLA) and the rules/guidelines issued thereunder, and takes into account the SEBI Master Circular dated 15.10.2019.

Under PMLA, all SEBI-registered entities must report suspicious transactions to Financial Intelligence Unit-India (FIU-IND), whether or not made in cash. Under Section 3, projecting proceeds of crime as untainted property constitutes money laundering; Section 4 provides for punishment.

2) Key Definitions

Money Laundering: Disguising financial assets so they can be used without detection of the illegal activity that produced them.

FIU-IND: The central national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions, and for coordinating with national/international agencies on AML matters.

“Suspicious Transaction” (Rule 2(1)(g) of PMLA Rules)

  • Gives rise to a reasonable ground of suspicion that it may involve proceeds of crime; or
  • Appears to be made in circumstances of unusual or unjustified complexity; or
  • Appears to have no economic rationale or bona fide purpose; or
  • May involve financing of activities relating to terrorism.

3) Illustrative Examples of Suspicious Transactions

Risk Indicators Table
Category Examples
Identity of Clients
  • Forged/invalid identification documents
  • False address details
  • Doubt over real/beneficial owner
Suspicious Background
  • Positive match with watchlists/adverse media
  • Accounts of publicly known criminals
Multiple Accounts
  • Large number of accounts sharing common introducer/signatory without rationale
  • Unexplained transfers among multiple accounts
Activity in Accounts
  • Unexplained activity in dormant accounts
  • Activity inconsistent with declared business
Nature of Transactions
  • Doubtful sources of funds/overseas remittances to non-relatives
  • Cash deposits at multiple locations; suspicious ATM/credit card use
  • Off-market demat transfers without rationale
Value of Transactions
  • Structuring just under reporting thresholds
  • Large value inconsistent with stated financial standing

4) Thresholds & Coverage

  • All cash transactions > ₹10,00,000 (or equivalent in foreign currency)
  • Series of cash transactions integrally connected within one calendar month that in aggregate exceed ₹10,00,000
  • All suspicious transactions whether or not in cash, including credits/debits to non-monetary accounts (e.g., demat)

This Policy supplements SEBI/FIU guidelines. Any subsequent statutory/SEBI guidance will be implemented immediately.

5) Objectives

  • Robust Client Due Diligence (CDD) via KYC before onboarding
  • Monitor/maintain records of qualifying cash transactions
  • Maintain series records for integrally connected cash transactions
  • Detect, monitor, and report suspicious transactions
  • Deter money laundering/terrorist financing activities
  • Adhere to the spirit and letter of PMLA

6) Client Due Diligence (CDD) & KYC

  • Collect KYC as per SEBI requirements, including In-Person Verification (IPV) where applicable, and FATCA declaration. Obtain self-attested copies of PAN, Address Proof, Aadhaar; verify originals.
  • For NRIs: Passport/PIO/OCI, overseas address, and foreign Tax Identification Number (TIN) to be obtained.
  • Do not onboard a client if identity/documents cannot be verified due to non-cooperation or unreliability of information.

7) Risk Categorisation (Illustrative)

Risk Categorization Table
Type Recommended Risk Rationale / Notes
Salaried Low Fixed income; entries correlate to known sources
Senior Citizens Low / Medium Source not always clear; possible third-party operation
Housewife Low / Medium Source not always clear; possible third-party operation
Self-Employed / Professionals Low (Film industry: Medium) CAs, Architects, Doctors, Lawyers, Sportsmen, etc.
Non-Resident Individuals Low / Medium IPV done → Low; if no IPV, categorize as Medium
Politically Exposed Persons (PEPs) High Enhanced due diligence; verify identity, public domain checks, source of funds; monitor on an ongoing basis. Apply to family/close relatives as well.

8) Maintenance & Preservation of Records

Records to Maintain (Rule 3):

  • All cash transactions > ₹10 lakh (or equivalent FCY)
  • Series of integrally connected cash transactions within a month aggregating to > ₹10 lakh
  • All suspicious transactions (cash and non-cash)

Information to Preserve:

  • Nature of the transaction
  • Amount and currency
  • Date of transaction
  • Parties to the transaction

Retention: Maintain and preserve all above records for 5 years. Identification documents (KYC proofs) must also be preserved for 5 years after the business relationship ends.

9) Reporting to FIU-IND & STR Timelines

Report information relating to qualifying cash transactions and suspicious transactions to the Director, FIU-IND, as required.

Suspicious Transaction Report (STR): File within 7 days of forming a conclusion that a transaction (cash or non-cash), or integrally connected series, is suspicious. Include reasons for suspicion.

10) Applicability & Declaration

I, Pavan Kumar Manchiraju (“Investment Adviser”), SEBI Registration No. INA000018975, implement the above AML guidelines as guiding principles for my investment advisory activities. These guidelines apply to me and to any employees/associates.

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