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Customer Due Diligence

s who beneficially own or control securities account. Whenever it is apparent that the securities acquired or maintained through an account are beneficially owned by a party other than the client, that party should be identified using client identification and verification procedures. The beneficial owner is the natural person or persons who ultimately own, control or influence a client and/or persons on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement. (b) Verify the customer s identity using reliable, independent source documents, data or information; (c) Identify beneficial ownership and control, i.e. determine which individual(s) .....

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correspondence addresses and other addresses if applicable), nature of business activity, trading turnover etc . and manner of making payment for transactions undertaken. The parameters should enable classification of clients into low, medium and high risk. Clients of special category (as given below ) may, if necessary, be classified even higher. Such clients require higher degree of due diligence and regular update of KYC profile. c) Documentation requirement and other information to be collected in respect of different classes of clients depending on perceived risk and having regard to the requirement to the Prevention of Money Laundering Act 2002, guidelines issued by RBI and SEBI from time to time. d) Ensure that an account is not ope .....

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lf the customer should also be carried out. f) Necessary checks and balance to be put into place before opening an account so as to ensure that the identity of the client does not match with any person having known criminal background or is not banned in any other manner, whether in terms of criminal or civil proceedings by any enforcement agency worldwide . 5.3 Risk-based Approach 5.3.1 It is generally recognize d that certain customers may be of a higher or lower risk category depending on circumstances such as the customer s background, type of business relationship or transaction etc. As such, the registered intermediaries should apply each of the measures on a risk sensitive basis. The basic principle enshrined in this approach is that .....

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raud is highly prevalent. i. Non face to face clients j. Clients with dubious reputation as per public information available etc. The above mentioned list is only illustrative and the intermediary should exercise independent judgment to ascertain whether new clients should be classified as CSC or not. 5.5 Client identification procedure : The Know your Client (KYC) policy should clearly spell out the client identification procedure to be carried out at different stages i.e. while establishing the intermediary - client relationship, while carrying out transactions for the client or when the intermediary has doubts regarding the veracity or the adequacy of previously obtained client identification data. The client should be identified by the .....

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