AML & KYC Policy

1. Introduction and Regulatory Basis

This Policy has been framed by Alphaware Advisory Services Private Limited ("the Company") to comply with the applicable Anti-Money Laundering (AML) standards and to prevent the Company from being used as a vehicle for money laundering or terrorist financing. It draws from the Prevention of Money Laundering Act, 2002 (PMLA) and rules thereunder, SEBI's guidelines on AML/CFT standards for registered intermediaries, and the recommendations of the Financial Action Task Force (FATF). Suspicious activity is reportable to the Financial Intelligence Unit – India (FIU-IND).

The shorthand "CATCH" summarises the five main elements of implementation:

• Control your business by having anti-money-laundering systems in place
• Appoint a Principal Officer
• Train your staff
• Confirm the identity of your customers
• Hold all records for at least 8 years

2. Policy Objectives

• To prevent criminal elements from using our business for money laundering or terrorist financing activities.
• To understand the investor/client and their financial dealings better, which in turn helps us manage risk prudently.
• To put in place a robust customer onboarding process which minimises the risk of onboarding customers who pose a compliance, money laundering or terrorist financing risk.
• To put in place appropriate controls for detection and reporting of suspicious transactions in accordance with applicable laws and laid-down procedures.
• To comply with applicable laws and regulatory guidelines.

3. Key Elements of the Policy

No cash transactions

The Company will not enter into cash transactions with clients for any reason whatsoever. All monetary exchange with clients takes place electronically — net banking, UPI, payment gateways and other banking channels.

Client due diligence

• Verify the identity of clients using reliable, independent source documents, data or information.
• Verify other information the client provides that is critical to transactions or that can be used to double-check identity.
• Partner with credible verification agencies to avoid loopholes in the system.
• Conduct ongoing due diligence and scrutiny to ensure that transactions are consistent with our knowledge of the client, their risk profile and, where necessary, source of funds.

Client acceptance

• Client-acceptance guidelines are strictly followed; existing and past relationships are verified regularly for continued authenticity.
• Clients are classified into risk categories (low, medium, high) based on volume of transactions, manner of payment and related factors.
• High-risk clients include: non-resident clients; individuals with a disclosed net worth greater than ₹10 crore; trusts, charities, NGOs and organisations receiving donations; politically exposed persons of foreign origin; clients with a dubious reputation as per available public information; and clients with mismatches in verification data across different checks. Due care and caution is exercised at the acceptance stage itself, and the profile of such clients is monitored and updated regularly.
• Medium-risk clients: clients who invest more than ₹1 crore and up to ₹10 crore.
• Low-risk clients: clients who invest up to ₹1 crore.
• No account is opened in a fictitious, benami or anonymous name; no transactions are allowed without verification of the client's bank account; beneficial ownership is ascertained where there are doubts; and no client is accepted where identity cannot be ascertained, information is suspected to be non-genuine, or the client does not cooperate in providing full and complete information.

Client identification

• Where KYC records are not available with a KRA, checks including identity verification, photo verification, bank account verification and video verification are completed before onboarding.
• Proof of identity: PAN card (original, un-expired, verified). Proof of address: Aadhaar (un-expired, original verified).
• Bank account verification uses penny-drop services to electronically validate the authenticity and status of the account.

4. Monitoring of Transactions

High-risk accounts are monitored at least once every calendar quarter, with exceptions reported to management and the Principal Officer. Transactions that appear suspicious — inconsistent with legitimate activity, with the client's normal pattern, with account-opening documents or with the client's financial capacity; sudden activity in dormant accounts; structuring below PMLA thresholds; or clients from high-risk jurisdictions — are reported to the Principal Officer immediately, who also undertakes random checks.

5. Maintenance of Records

All records, including client identification, account files and business correspondence, are maintained in hard and soft form for a period of eight years. Where an investigation has commenced, or a transaction has been the subject of a suspicious transaction report, records are maintained until the authority informs us of closure of the case.

6. Principal Officer

The Company has designated the Chief Executive Officer as the Principal Officer, responsible for implementation of and compliance with this policy: monitoring implementation of AML/CFT measures including customer due diligence, reporting of transactions and sharing of information as required by law, liaising with law-enforcement agencies, periodic reporting to the Board of Directors, and providing clarifications to staff on the provisions of the Act, rules, guidelines and this policy.

7. Staff Awareness and Training

Staff who deal directly with the public are the first point of contact with potential money launderers. Employees familiarise themselves with clients' normal activity and usual market practice so as to recognise anomalous behaviour, and never ignore suspicions concerning the source of assets or the nature of transactions. Staff do not disclose to the client concerned, or to third persons, that a transaction is deemed suspicious or that information may be transmitted to the authorities. The Principal Officer provides AML training to all employees at least annually.

8. Investor Education

Implementing these measures may require us to seek information from clients that is personal in nature or has not been called for previously — documents evidencing source of funds, income-tax returns, bank records, and similar. Staff sensitise clients that such requirements emanate from the AML/CFT framework, and educational material may be provided to explain the objectives of the programme.

9. Reporting to FIU-IND

The Company will submit Suspicious Transaction Reports (STRs) to FIU-IND in the prescribed format within the prescribed time — within 7 days of concluding that any transaction or series of integrally connected transactions is of a suspicious nature. The Principal Officer records reasons for treating any transaction as suspicious and ensures there is no undue delay in arriving at such a conclusion.