Purpose
The purpose of this AML & CTF Policy is to ensure that Off Capital Trading LTD(Company Number: HT00224021) and its staff can adhere to all legal and regulatory requirements related to the prevention of money laundering and financial crime.
1.1 Regulatory Compliance Focus
This policy underscores the critical importance of compliance with relevant legal and regulatory frameworks, emphasizing a proactive approach towards preventing money laundering and financial crime activities.
1.2 Internal Awareness Objectives
A key objective of this policy is to encourage staff members to actively consider potential financial crime risks in the course of their duties. This includes fostering a comprehensive awareness of Off Capital Trading’s internal procedures designed to deter any illicit use of the platform for financial crime.
1.3 Board Approval and Periodic Review
This Policy is not only approved but also endorsed by the Board of Off Capital Trading. Furthermore, it undergoes a minimum annual review in conjunction with the Annual Risk Assessment and Group requirements. This iterative review process ensures that the policy remains dynamic and effective in mitigating financial crime risks.
1.4 Connection with Code of Conduct
This policy serves as a reinforcement of Off Capital Trading’s Code of Conduct, emphasizing the critical intersection between maintaining the firm’s reputation and adhering to legal obligations.
1.5 Annual Review Cycle
The policy is subjected to an annual review, aligning with the broader risk assessment process. This regular review is imperative to ensure that the policy continues to provide robust guidelines for effective financial crime risk management.
1.6 Relationship with Other Policies
This policy operates in conjunction with other essential policies, namely:
A. Off Capital Trading KYC and Due Diligence Procedures
B. Off Capital Trading On-boarding and Customer Risk Assessment Procedures (including PEPs and Sanctions)
C. Off Capital Trading Compliance Monitoring Procedures
2. Anti-Money Laundering (AML) – the Requirements
2.1 Global Obligations for Effective Procedures
Globally, there exists a longstanding obligation to have effective procedures in place to detect and prevent money laundering. Specifically, Off Capital Trading (License Number: BFX2024036), registered as Off Capital Trading Limited in the St.Lucia is committed to adopting suitable AML policies and procedures.
2.2 Regulatory Compliance Commitment
Off Capital Trading is committed to adhering to all global standards and applicable legislation. The policies and procedures outlined in this document are meticulously designed to ensure the firm’s ability to detect and prevent money laundering activities.
2.3 Definition of Money Laundering
Money laundering is precisely defined as the process through which criminals seek to conceal the true origins and/or ownership of the proceeds or benefits derived from criminal activity. This process aims to make the proceeds appear legitimate, thereby allowing perpetrators to evade prosecution, conviction, and the confiscation of criminal funds.
2.4 Financial Institutions and Employee Awareness
Given that financial institutions are often exploited for money laundering, it is imperative for employees within the sector to be cognizant of the regulatory requirements placed on both the firm they work for and themselves as individuals.
2.5 Stages of Money Laundering
While money laundering is traditionally categorized into three stages, it’s important to note that these stages may not occur in every case. Nonetheless, the three classic stages include:
Placement: Physically introducing cash or other proceeds into the financial system.
Layering: Moving proceeds through various financial transactions to complicate the audit trail.
Integration: Sufficiently distancing funds from their origin to give the appearance of legitimacy and integrating them into the economy.
2.6 Layering Stage Exposure
The layering stage poses the greatest risk for Off Capital Trading. Employees should remain vigilant for any suspicious behavior by clients during this stage, such as attempting to make cash payments into their accounts or routing funds through third-party accounts.
2.7 Integration and Legitimacy
Integration is the point at which funds have been sufficiently distanced from their origin to achieve the appearance of legitimacy, making it crucial for Off Capital Trading to exercise due diligence to prevent such integration.
3. Suspicious Activity
3.1 Key Indicators of Suspicious Activity
During the layering stage, Off Capital Trading is particularly at risk. Employees should exercise vigilance for any suspicious behavior by clients, including but not limited to:
- Trying to make cash payments into their account.
- Depositing money only to withdraw it at a later date without engaging in any trading activity.
- Deposits exceeding the amount stated as available for trading on application forms.
- Routing funds through third-party accounts.
- Engaging in trading without considering transaction costs.
- Making extensive use of overseas accounts or complex corporate structures.
- Funds for a transaction arriving from an unusual source.
- A customer exhibiting an unusual level of concern for secrecy, especially regarding identity, business type, or source of assets.
- Lack of general knowledge about its industry for a corporate customer.
- A customer showing indifference to risks, commissions, or other trading costs.
- A customer acting as an agent for another entity but being evasive about the other entity’s identity.
- A customer from, or having accounts in, a country identified as a haven for bank secrecy, money laundering, or narcotics production.
- Extensive, sudden, or unexplained wire activity, especially involving countries with bank secrecy laws.
- Depositing funds followed by a request to wire or transfer the money without any apparent business purpose.
- Trading patterns inconsistent with information provided in application forms.
3.2 Reporting Process
Any suspicions must be promptly reported to info@offcapitaltrading.com. It is the duty of the AML/CTF reporting officer to investigate all suspicions and decide whether to escalate the details to external agencies and regulators where applicable.
4. Client Account Opening & Due Diligence
4.1 Importance of Client Information
Having sufficient information about a client is an invaluable tool in the fight against financial crime and can protect Off Capital Trading from reputational and financial risk.
4.2 Customer Due Diligence (CDD)
Customer due diligence involves finding out the intended purpose and nature of the business relationship, identifying the customer, and verifying their identity based on reliable documents or data. Natural persons and legal entities undergo identification and verification as part of the on-boarding process.
4.3 Risk-Based Approach
Off Capital Trading adopts a risk-based approach, considering factors such as business type, delivery channels, customer base, and geographic location of clients. Additionally, PEP and Sanction checks are conducted during on-boarding using relevant online systems.
5. Training
5.1 Importance of Training
The firm must ensure that systems and controls include appropriate training for its employees in relation to money laundering.
5.2 Training Initiatives at Off Capital Trading
At Off Capital Trading, all new employees are required to attend an introductory financial crime presentation provided by the Compliance department. Regular refresher training is provided for existing employees, usually in the form of computer-based testing. Ad-hoc training sessions are conducted as deemed necessary by the Compliance Department, with updates provided to staff.
6. Record Keeping
6.1 Importance of Record Keeping
Firms must keep records of client identity, transactions, and financial crime training to mitigate risks and demonstrate compliance.
6.2 Document Retention Period
Off Capital Trading retains a copy of each client’s identity evidence for five years after the client ceases to be a client or from the date of the last transaction if there is no formal termination of the relationship. Records of each transaction must also be retained for five years from the completion date.
7. Terrorist Financing
7.1 Definition of Terrorism
Terrorism involves the use or threat of action to influence the government, intimidate the public, or advance a political, religious, or ideological cause.
7.2 Financial Institutions and Terrorism
The relevance to financial institutions is “terrorist property” and the laundering of such property. It is defined as money or other property likely to be used for terrorism or proceeds of acts carried out for the purposes of terrorism.
7.3 Distinctions Between Terrorist Financing and Money Laundering
While similarities exist, differences include the minimal amounts required for individual terrorist acts and the challenge of identifying when legitimate funds transform into terrorist property.
7.4 Obligations on Off Capital Trading
Off Capital Trading’s obligation in combating terrorist financing is to report any suspicious activity to the authorities, supporting law enforcement agencies in freezing property where there are reasonable grounds to suspect it could be used for terrorist activity.
8. Fraud
8.1 Definition of Fraud
Fraud encompasses any attempt, successful or not, to secure an unfair or unlawful gain through deliberate misrepresentation or omission of material facts.
8.2 Fraud Prevention at Off Capital Trading
Various safeguards are in place at Off Capital Trading to prevent fraud, including a Code of Conduct, client take-on standards, client authentication, and payment process standards.
8.3 Fraud Detection/Reporting
Procedures are in place to detect and report any fraudulent activity, and employees are obligated to report suspicions to the AML/CTF reporting officer. Internal reporting is crucial in initiating further investigation or external reporting when necessary.
9. Anti-Bribery & Corruption
9.1 Definitions
Bribery is defined as offering money, services, or valuable items to induce someone to do something in return. Corruption is acting dishonestly for personal gain, abusing an official position to the disadvantage of others.
9.2 Measures to Combat Bribery
Procedures in place at Off Capital Trading to combat bribery and corruption include a Whistleblowing Policy, Gifts and Inducement Policy, periodic policy reviews, training for all staff, and checks for Sanctions and Politically Exposed Persons (PEPs) for every new client.
10. Market Abuse
10.1 Introduction
Market abuse pertains to behavior by an individual or group in relation to qualifying investments traded on a prescribed market. There are seven types of abusive behavior, covering insider dealing, improper disclosure, misuse of information, manipulating transactions, manipulating devices, dissemination, and distortion.
10.2 Indications of Suspicious Transactions
Several indicators of suspicious transactions include significant orders made immediately after opening an account, transactions significantly deviating from a client’s usual behavior, unusual trading patterns before price-sensitive information announcements, and an employee’s own account transactions timed before client transactions.
10.3 Suspicious Transaction Reporting
Any suspicions of market abuse or suspicious transactions must be reported to the AML/CTF reporting officer without delay for further investigation and potential external reporting.
11. Responsibilities
11.1 Senior Management
This Policy is approved and endorsed by the Board, with quarterly reports on AML issues submitted to the risk committee.
11.2 The AML/CTF Reporting Officer
The AML/CTF reporting officer is designated to provide an annual report to the Board on systems and controls for preventing money laundering. The officer also conducts an annual AML Risk Assessment, investigates internal suspicions, and communicates well-founded details to external agencies and regulators as necessary.
11.3 On-going Monitoring
Off Capital Trading’s Compliance department undertakes various monitoring programs to prevent the platform’s use in financial crime. This includes weekly sampling of client accounts and daily checks of funds paid into client accounts for suspicious activity.
12. Declaration
You must sign the declaration below, indicating that you have read and agreed to comply with the policies and procedures at Off Capital Trading (Company Number: HT00224021) to prevent money laundering, terrorist financing, and financial crime. Please return this to Compliance.
Risk Warning
Off Capital Trading LTD offers trading on Foreign Exchange (‘Forex’ or ‘FX’) and Contracts for Difference (‘CFDs’), which are complex financial products that are traded on margin. They carry a high level of risk since leverage can work both to your advantage and disadvantage. As a result, these products may not be suitable for all investors, as loss of all invested capital may occur. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved and consider your investment objectives and level of experience. Seek independent advice, if necessary.
Off Capital Trading LTD does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. Off Capital Trading LTD is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.
This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulation. Services are not available for residents of Turkey, USA, North Korea.
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