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COMPLIANCE TRAINING 18th FEBRUARY_ 2008 Powered By Docstoc

• In this session we will:
   – Overview of compliance department
   – Describe the account opening process
   – Explain KYC form
   – Discuss the Anti-Money laundering act
                  Team Work Activity

• Four questions:
   1. What do you think is the role of Compliance?
   2. What are the steps in account opening process and what care
      should be taken?
   3. What is the necessary documentation required for different
      types of clients individual and non-individual?
   4. What is AML?

   Note: Form 4-5 teams & each team will present one question
         after discussing.
         Key aspects of Compliance team

                            KYC Form

Co-ordination within          Role             Client Servicing &
    Branch and              Compliance             Activation
 Ahmedabad H.O                team

                       Observing Compliances
Steps for Trading account opening

       Meet the client - explain products & services

                                PAN card is mandatory

           Collect information from the client

                                 All information should match with the proofs submitted

              Verify documents with originals

                                 All proofs should be self-attested by client & branch head

            Verify clients name on IT website

                                 In case of discrepancy get relevant undertakings

       Take valid & functional email ID of the client

                               Required in case of online trading
Steps for Trading account opening

        Signed cheque used for sign verification
                              Signed cheque of the running bank account

        Every correction should have clients sign
        Important Points to Remember

X Never register a client without actually
  meeting with him
X Never indulge in fraudulent activities like
  bouncing of account opening cheque,
  signature forging, tampering with client
X Do not forge witness signatures nor act as a
X Don’t create an email id on behalf of the
  client/never write your own email address in
  the registration kit
        Important Points to Remember

X Never keep complete signed registration kits/
  cheque from clients in your custody for more
  than one day, these should be handed over to
  the branch back office team the same day
  they are collected from the clients
X Never accept supporting documents given by
  client without verifying them with the
X Do not open any Joint Trading Accounts
       Important Points to Remember

X Do not leave the clients place without
  rechecking the documents with respect to
  expiry date, validity, clarity and sufficiency
X Never waste pre-franked registration kits
X Never collect a third party cheque from the
X Never   leave     client’s    place  without
  completely filling the kits in front of him/
Know Your Client-
           Registration of New Client

• Individual
• Non-Individual
        Element of Client Registration kit

• Mandatory requirements
   – Broker client agreement
   – Risk disclosure document
   – Investors rights and obligations
• Voluntary requirements
                  Basic Concepts
• Broker
• Sub-broker
• Remisier
• Unique client code
• Contract note
               Sub-broker VS Remisier

• Sub-broker                       • Remisier
   • A sub broker is a person/        • In order to provide
     entity who is registered           additional services to
     with SEBI and is affiliated        investor, BSE has
     to a member of a                   introduced concept of
     recognised stock exchange          remisier
   • Sub broker's registration        • Remisier is an entity which
     number with SEBI begins            brings business to the
     with the letter “ins”              member broker and gets
                                        commission for the same
                                      • An application for remisier
                                        is required to be approved
                                        by BSE
Anti-Money Laundering
        Important considerations of AML

• AML deals with morality and integrity of client
• The act deals with combating siphoning of money into
  illegal activities
• Every banking company , financial institution and capital
  market intermediary needs to maintain record of all
  transactions, the nature and value as per prescribed
      Important considerations of AML

• Financial intelligence unit has set up a multi
  disciplinary unit for establishing link between
  suspicious and unusual financial transactions
  and underlying criminal activities
1. Tripartite Agreement is between Broker, Remisier and
   Client (True/ False)
2. Risk Disclosure Document is a Voluntary requirement
   in Registration Kit. (True/ False )
3. Sub-broker can issue contract notes to its clients in
   BSE Segment today (True/ False)
4. Whenever Client is shifted from one branch to
   another branch, first new account has to be activated,
   then only old account has to be de-activated.

1. Sub-broker cannot register with more than one broker.
2. Remisier can be registered with more than one
   member w.r.t a single stock Exchange. (True/False)
• Tick Mark the correct option
• HUF can be a remisier in
   –   NSE
   –   BSE
   –   NSE (Derivative segment)
   –   None of the Above

• One of the following options is True. Tick Mark the
  True Option.
• Corporates cannot be
   –   Sub-broker in NSE Segement
   –    Remisier in BSE Segment
   –   Authorised Person in NSE Segment
   –   None of the Above

• Tick Mark the correct Option
• To allot CTCL terminals in NSE Segment following is
• CTCL Allotment Request
• CTCL Agreement
• Exchange Registration
• All of the above
• Only a and b above

• One of the following is false. Please tick Mark the false
• For submitting documents for sub-broker following is a
  valid requirement.
   –   Photo-Id Proof and Address Proof of Sub-broker
   –   Certified True Copy of Age and Education Proof of Applicant.
       (Minimum education Qualification is S.S.C)
   –   SEBI registration fee of Rs 10000/- .
   –   Two original reference Letters including one from banker and
       one from Chartered Accountant recommending application.

• Tick Mark the False Option
• It is not compulsory for franchisee to sign the following
   –   CTCL Agreement
   –   Commercial Terms and Conditions
   –   Remisier Agreement
   –   Rent Agreement
   –   Funding Agreement
Thank You
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