AML Policy

Prospergate Capital Ltd (hereinafter “The Company”), collects and verifies the personal identification information of all account holders, and then subsequently logs and tracks the transactions that are carried out on behalf of its clients and according to the Investment Management agreement signed between the client and the company.

In order to open an account with the Company, a valid form of government-issued identification (Passport, ID,), a proof of residence (utility bill, confirmation of residential address ,etc.) and bank account information is required, along with a completed Investment Management Agreement, a full signed account opening application and all completed appendices of the Investment Management Agreement.

It should be noted that the Company tracks any suspicious transactions made by clients as far as depositing funds in the accounts that Prospergate Capital is assigned to manage. Once a suspicious transaction is identified It is reported to the Company’s Money Laundering Officer who will assess the suspicious transaction based on the information provided and will submit an internal report (SAR) to the Board. If deemed appropriate, the suspicion will be duly reported to UNIT FOR COMBATING MONEY LAUNDERING (“MOKAS”) . The Company carries out its activities in line with the anti-money laundering framework as laid out by the Financial Action Task Force (FATF)**. Also, the Company monitors funding from bank accounts held outside the account holder’s home country.

Account Opening Procedures – Know your Customer Policy (KYC)

As part of the account opening procedure, prospective customers must provide proof of identity and address(as described above), source of funds and investment objectives to the Company.

The Company is operating under Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (the “Markets in Financial Instruments Directive (2014/65/EU)” or “MiFID II”) and amending Directive 2002/92/EC and Directive 2011/61/EU, as last amended by Directive (EU) 2016/1034 of the European Parliament and of the Council, of 23 June 2016 and under Regulation (EU) No 600/2014 of the European Parliament and the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (the “MiFIR”) which was implemented in Cyprus by the Investment Services and Activities and Regulated Markets Law of 2017 (Law  87(Ι)/2017), which procure for the provision of Investment Services, the exercise of Investment Activities, the operation of Regulated Markets and other related matters (the “Investment Services and Activities and Regulated Markets Law”), as the same may be modified and amended from time to time.

The back office upon receipt of an application for a new client shall consult with the compliance officer, who in turn will assess and approve the new client before a business relationship is established. All clients of the company are obliged to fill out and sign (either hardcopy or by electronic signature) relevant account opening documentation and provide any supporting documentation. During the process the back office or Portfolio Management department acts as a point of contact with the potential client for online margin trading accounts, while the compliance department independently assesses the completeness of the information provided.

The company does not provide any investment services and does not affect any transactions with any client, prior to the completion of the account opening process and the signing of agreement between the company and the client.

The client agreement is specific for the investment services requested by the client and shall delineate, in precise, analytical and comprehensible terms, the rights and obligations, of both, the company and the client, as well as other significant information for the awareness of the client and the execution of the agreement.

Verification criteria for client information provided for account opening:

  • Correctness, authenticity and completeness of the information provided by the client/applicant.
  • Creditworthiness of the client/applicant, through a relevant database search in order to determine whether the client is a Politically Exposed Person (PEP) or is subject to any adverse media or sanctions.
  • Probability that the client/applicant is involved in illegal or criminal activities.
  • Completeness of the required agreement documents.

Account opening requests to be rejected:

  • Where all the necessary information/documentation is not duly provided by the client/applicant.
  • Where the client/applicant is of doubtful creditworthiness or there are reasons to believe  that they may be involved in illegal or criminal activities.
  • Where the Compliance Officer and/or Board decide on their own discretion that they do not want any business relationship with the client/applicant.

Procedure for the Opening of a new Client Account

The relevant department contacts the client to facilitate the provision of a copy of the account opening documentation and inform the client of required supporting documentation as per the KYC policy, documented in the company’s “Manual for the Prevention of Money Laundering and Terrorist Financing”. The relevant department performs the Appropriateness and Suitability test as the internal operation manual suggests. The relevant department classifies the client as retail, professional or eligible counterparty as per applicable regulation and proceeds of the account opening procedure in accordance to the regulatory requirements. The relevant department receives from the client (a) complete and signed account opening documentation and (b) all required supporting documentation. The relevant department checks the documents for completeness and if necessary contacts the client to obtain additional information. Once the relevant department is satisfied with the account opening documentation, it completes the document checklist and this is forwarded to the compliance officer along with all other documentation. The compliance officer will independently check the documentation for completeness and compliance with the company’s “Manual for the Prevention of Money Laundering and Terrorist Financing”. At his/her sole discretion the compliance officer will:

Contact the relevant department to request additional information/supporting documentation.

Take any other action allowable under the company’s AML policy such as refuse to open an account and/or report to MOKAS if deemed necessary.

Authorize the opening of the account, sign the document checklist and may forward the documents to the Risk Management Committee for further approval. Two members of the Risk management Committee check and authorize the opening of the account signing the checklist, if such check was requested by the compliance officer. The back office receives signed documents and in the case of online trading clients enables the account for online trading.

The policy/procedure stipulates the criteria for accepting new clients, the categories of persons not acceptable as clients, the categories of low risk, normal risk and high risk clients, the collection of primary information about the client, analyzing it and making decision about concluding an agreement with the client for the provision of services.  All clients complete and sign the relevant questionnaire of the Company.

Clients on a risk basis are subdivided as follows:

– Low risk

– Normal risk

– High risk

High risk category includes dealing with a natural person or legal entity established in a high-risk third country, with respect to cross-border correspondence relationships with an institution customer from a third country, with respect to transaction or a business relationship with a politically exposed person (or a family member or a close associate) &App.II of 188(I)/2007, legal persons with complex ownership structure, companies with bearer shares, companies incorporated in offshore centers, nonprofit organizations, trusts accounts, customers whose transactions involve significant amount of cash (over €10.000 or equivalent irrespective of whether the transaction is carried out as a single transaction or a number of transactions which appear to be linked between them according to Law 188(I)/2007-Art.5A), customers (including legal entities thus beneficial owner/s) from high risk countries or from countries known for corruption or organized crime and drug trafficking (i.e. Afghanistan, Iraq, Africa-Latin America countries), where the origin of funds is from high risk countries or from countries known for corruption or organized crime and drug trafficking or where the funds cannot be easily reasoned or verified, where there is unwillingness of customers to provide information on the structure and/or beneficial owners of a legal entity, Politically Exposed Persons (PEPs) and non-face to face clients are also classified as high risk clients. The Compliance Officer performs on-going monitoring of transactions and activities of high risk clients and enhanced customer identification and due diligence measures are applied in relation to high risk clients.

Normal risk category includes the clients that are known to the Company or have met face to face with the staff of the Company and any clients not specifically falling within the high risk or low risk categories. The standard client identification procedures are applicable in such cases.

Low risk category (Abolished by Art.63 of the new AML Law, App.II includes a list of clients who can be considered low risk) includes credit or financial institutions operating within the European Union or in third countries which in accordance with the decision of the, listed companies in a regulated market within the European Union or third country which is subject to equivalent requirements with the European Union ones.

In case of a client being classified as low risk simplified due diligence may be applied during the identification procedures.

The Head of the Compliance Department prepares and maintains the lists for the categories of clients which contain the customers’ names, account numbers, date of commencement of business relationship which are continuously updated.

Failure to Provide Personal Information

As a general principle, you will provide us with your personal data entirely voluntarily; there are generally no detrimental effects for you if you choose not to consent or to provide personal data. However, there are circumstances where the Company cannot take action without certain of your personal data, for example because the collection of personal data is required to process with your instructions or orders or to carry out a legally required compliance screening. In such cases, it will not be possible for us to provide you with any services without first obtaining the relevant personal data and we will notify you accordingly.

Compliance Footnote

The compliance procedure related to AML listed above is only a brief summary of the compliance function guidelines followed by Prospergate Capital Ltd compliance team. A detailed copy of our compliance policy is available for qualified institutions, regulatory bodies, and related counterparties. For additional questions concerning Prospergate Capital Ltd policies, please contact our Compliance department. No substitutions or modifications will be accepted to the requirements above. Prospergate Capital Ltd Compliance department reserves the final determination regarding the validity of these documents. Clients should assume that all information provided to Prospergate Capital Ltd is available to the competent regulatory authorities in (a) the country of incorporation of the Company, i.e. the Republic of Cyprus; (b) the country of origin of any funds transmitted to The Company; and (c) the destination country of any funds refunded by or withdrawn from the Company. Prospergate Capital Ltd does not want your business if your funds are sourced from criminal activities or if the nature of your account transactions is illegal in any manner whatsoever.

Prospergate Capital Ltd reserves the right to review and/or amend its Money Laundering Prevention Policy, at its sole discretion, whenever it deems fit or appropriate.

Our AML Policy is a policy only, it is not part of our Terms and Conditions of Business and is not intended to be contractually binding.

* ‘Politically exposed persons’ (PEPs)Natural persons who have or had been entrusted with prominent public functions in the Republic or in a foreign country, as well as immediate family members, or persons known to be close associates, of such persons.
Prominent public function includes any of the following public functions:

– Head of State, head of Government, deputy and minister or assistant minister;

– Member of parliament or similar legislative body;

– Member of a Political Party governing body;

– Member of supreme court, of constitutional court or of other high-level judicial bodies  whose decisions are not subject to further appeal, except in exceptional circumstances;

– Member  of courts of auditors or of the board of central banks;

– Ambassador, chargés d’affaires and high-ranking officer in the armed forces;

– Member of the administrative, management or supervisory bodies of State-owned enterprises

– Director, deputy director, member of the board or persons holding an equivalent position in an international organization

– Mayor

None of the categories set out above shall be understood as covering middle ranking or more junior officials.

** The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.  The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

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