INTRODUCTION
BILLMAR CAPITAL (PTY) LTD is an Investment Firm that owns and operates the brand “Billmar Capital” (www.billmarcapital.com). BILLMAR CAPITAL (PTY) LTD is registered in South Africa, company number 2016/214844/07, and is authorized and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa with license number 471259 to carry out certain categories of financial investment business as permitted under section 8 of the Financial Advisory and Intermediary Services Act, 2002 (Act No.37 of 2002). The Company’s registered office is located at 3rd Floor Palm Grove, Houghton Estate Office Park, 2 Osborn Road, Houghton, 2198 Gauteng. Please refer to the www.billmarcapital.com of the Company for more information.
The Company is operating under the Section 8 of the Financial Advisory and Intermediary Services Act, 2002 (Act No.37 of 2002) (collectively the “Act and Applicable Regulations”).
The brand “Billmar Capital” is owned and operated by BILLMAR CAPITAL (PTY) LTD duly registered in South Africa with a registration number 2016/214844/07 holder of an FSCA license with number 471259 and registered address at 3rd Floor Palm Grove, Houghton Estate Office Park, 2 Osborn Road, Houghton, 2198 Gauteng.
1. Completion of online application and Information requested
The Company must inform all Clients at all times of the significance that the precise completion of the online application and the KYC and other documents required to be uploaded bears, in order to enable the Company to provide accurate service, protection and promotion of the Client’s interests.
The Client needs to provide information with regards to the following:
- Name and Surname
- National Identity ID number / International Passport
- Nationality
- Date of Birth
- Telephone Number
- Permanent Address
- Currency
- Gender
- Tax Identification Number
- LEI (for Legal Entities)
In order to know the Client’s financial situation and experience with investments the client must also provide online information with regards to the following:
- Employment Status
- Estimated Annual Income
- Estimated Net Wealth
- Leverage (set by default)
- Trading Experience
- Type of Financial Instrument
- Frequency of transaction
- Average Volume in monetary value
- Investment Knowledge
- Attended Seminars in Forex/CFDs
- Previous Experience
- Relevant Academic or other qualifications
Further to the above information submitted through the online registration and where applicable the Company may request to obtain information with respect to the Client’s investment targets, primarily on the intended investment horizon (short-, medium-, long-term) as well as the Client’s risk appetite (low, medium or high). If needed the Client’s financial holdings evaluation must include a broader view of the Client’s portfolio of assets, among others, the Client’s specific source of income, as well as the Client’s primary assets (real estate, financial assets, valuables, and other significant assets), the Client’s monthly expenses and debt obligations.
2. Verification procedures
The Company must ensure as reasonably practical after the first contact has been made with the client and the online application has been completed, the requested identification documents are duly provided by the Client in order for the verification process to be performed. If there is knowledge or a suspicion of money laundering, it will be reported without delay to the Compliance Officer of the Company.
2.2 Methods of Verification
The Company shall ensure that it is dealing with a real person or legal entity and shall further obtain sufficient evidence to establish that the applicant is that person or organization. When reliance is being placed on any third party to identify or confirm the identity of any applicant, the overall legal responsibility to ensure that the procedures and evidence obtained are satisfactory rests with the Company.
As no single form of identification can be fully guaranteed as genuine, or representing the identity of a client, the identification process will need to be cumulative, and no single document or source of data must therefore be used to verify both name and permanent
address. It is therefore noted that verification of identity and address shall never be
performed based on a single document.
The Company will take all required measures, according to the Regulatory Framework as this may be issued by the Competent Authorities from time to time in order to establish the identity of its clients and beneficial owners (applicable for legal entities). It is further noted that the type of documents to be provided shall be in conformity with the internal policies and procedures of the Company whereas the Company may accept copies of identification.
2.3 Due diligence
During the registration process, the clients are requested to provide information for the Company to be eligible to assess the following areas and to further facilitate the construction of the economic profile of the clients. Specifically, the clients are requested to provide information with regards to the following areas:
- Personal Information
- Source of wealth (description of the economic activity which has generated the net worth)
- Estimated net worth
- Source of funds that will be deposited to the client’s account
- Financial background
- Trading Experience
It is further noted that the Company may at all times and where it deems to be necessary in accordance with the internal policies and procedures of the Company, apply enhanced or simplified due diligence and request additional documents regarding the verification of perspective clients.
2.4 Establishment of Verification of Individual Customers
The identity of clients will be established to the Company’s satisfaction by reference to official identity papers such as passport and/or national identity card and/or driving licence (where applicable) or such other evidence as may be appropriate under the circumstances in addition to evidence for the verification of residence of the clients.
Regarding proof of address the Company must derive such information from a separate document. The client’s permanent address shall be verified using the following method:
- The production of a recent (up to 6 months) utility bill, local authority tax bill or a bank statement or any other document same with the aforesaid.
2.5 Establishment of Verification of Corporate customers
Where the applicant company is listed on a recognized or approved stock exchange or where there is independent evidence to show that the applicant is a wholly owned subsidiary or subsidiary under the control of such a company, no further steps to verify identity over and above the usual commercial checks and due diligence will normally be required.
Where the applicant is an unquoted company where none of the principal directors or shareholders already have an account with the Company, the following documents will be obtained from an official or recognized independent source:
- A copy of the certificate of incorporation/certificate of trade or the equivalent;
- Evidence / Certificate of the company’s registered address;
- Certificate of shareholders and directors.
- Extract from Commercial Register, or equivalent document, evidencing the registration of corporate acts and amendments.
- Names and addresses of all officers and directors of the corporate entity
- Names and addresses of the beneficial owners of the corporate entity
- KYC documents for Shareholder and Directors
- Memorandum and Articles of Association or equivalent documents duly recorded with the competent registry.
- Group structure and information (if applicable)
- Description and nature of business including:
- Date of commencement of business;
- Products or services provided;
- Location of principal business
- Recent financial statements on the corporate entity (if available)
2.6 Establishment of Verification of Trusts
Where the client is a trustee, the Company will ensure that it understands the structure of the Trust, based on the information and documentation provided by the client, sufficiently to determine the source of funds (e.g. settlor), those who have control over the funds (e.g. trustees) and any persons or entities who have the power to remove the trustees. The Company will make a reasonable judgment as to the need for further due diligence. The Company can proceed to open a trading account for a Trust only after the written approval of an Executive Director.
It is noted that customer due diligence measures need to be applied for the trustee(s), beneficiaries, settlor as well as the protector. Information must also be provided with regards to the purpose of the trust establishment, the type of trust, provide extracts from the trust agreement and evidence of the trusts registry it is registered with.
2.7 Verification of Identity of Beneficial owners
Pursuant to the Clients Acceptance Policy and the AML Manual of the Company, the Company when accepting prospective clients and/or during the business relationship with clients, shall take into consideration the risk factors with regards to low and normal risk clients and similarly with regards to high risk clients. The factors act as guidance when determining whether to accept a prospective client and/or regarding the categorisation of the given client into low, medium/normal or high risk according to the its categorisation by the Compliance Officer of the Company.
The Company must ensure that it has sufficient information for the identification of the Beneficial Owner of all the trading accounts. Due diligence must be performed on all principal owners identified in accordance with the following categories:
a. Natural persons
Where an applicant is an individual, the Company must clearly establish, based on information and documentation provided by the client, whether the client is acting on his/her own behalf and to be provided with all the necessary documents that proves the Identification of the person and his proof of address as well as the information and documentation described above.
b. Legal entities
Where the client is a legal entity, such as a private investment company, the company must understand the group/structure of the company (client), based on the information and documentation provided by the client, sufficiently to determine:
- The source of funds,
- Principal owner(s) of the shares and those who have control over the funds,
e.g. the directors and those with the power to give direction to the directors of the company.
With regard to other shareholders, the Company will make a reasonable judgment as to the need for further due diligence. This principal applies regardless of whether the share capital is registered or is in a bearer form. In cases of nominee shareholders, the Company shall request the Declaration of Trust to establish the Beneficial Owner.
In respect of legal entities, the ultimate beneficial owner is specified as “a natural person who ultimately holds a shareholding, controlling interest or ownership interest over 25% of the shares or the voting rights in a corporate entity”. In case where no natural person can be identified as the one who ultimately owns or has control over a legal entity, then having exhausted all other means of identification, and provided there are no grounds for suspicion, may consider the senior managing official (i.e. controlling person) to be the beneficial owner.
3. High-risk jurisdictions
The Company will apply heightened scrutiny to clients’ resident in and funds sourced/originating from jurisdictions identified by credible sources as having inadequate anti-money laundering standards or representing high-risk for crime and corruption. The Company will apply more stringent standards to the transactions carried out by clients or beneficial owners domiciled in such countries as such clients such be categorised according to the internal policies and procedures of the Company. The Company further reserves its right to request additional verification information for any client originating from such jurisdiction.
3. High-risk factors i.e. customer risk factors, product factors, geographical risk factors
According to policies of the Company and the factors to be taken into consideration as indictive for high-risk, enhanced due diligence and/or additional measures shall be engaged in order to identify and or mitigate any potential risk to money laundering.
4. Politically exposed persons (“PEPs”)
PEPs shall bear the definition attributed in the Legislation. It is further stipulated that individuals who are considered to be PEPs shall be caregorised as High Risk by default and shall undergo more regular monitoring according to the internal procedures of the Company.
5. Verification responsibility
It is the responsibility of the Head of Back Office department to verify the identity of prospective clients when taking on a new client. The Company shall ensure the verification of identification procedures are duly performed and the clients provide all requested documentation in order to be eligible for the establishment of a business relationship, as per the internal policies and procedures of the Company, from time to time.
6. Verification procedures Executive Director/Compliance Officer approval
The verification process should be documented by making a record of the relevant information on the Company’s Online Questionnaire and the necessary documents that are uploaded on the system. If in doubt as to which information must be obtained to verify an applicant’s identity the Back-Office Department must consult the Executive Director or Compliance Officer for guidance without delay and prior to commencing any dealings.
Once a prospective client has completed the Online Questionnaire and has provided the requested identification documents the Back-Office Officer shall ensure that the Back-Office Checklist Form (is duly completed and signed whereas all the documents provided by the client and/or prospective client are saved on the Google Drive of the Company in the designated folders with the clients’ files. Further to the documents, additional measures and or verification means may be engaged in order to verify the information provided by the client i.e. WorldCheck.
7. Client Classification
An important part of the customer account opening procedure is the classification of the prospective Client based on the Customer Categorization Policy of the company into one of the following categories:
- Professional Clients
- Retail Clients
- Eligible Counterparties
During the registration of a prospective client with the Company, the client needs to answer the online questionnaire which contains information on his/her trading knowledge, financial background, personal information and questions which to assess their trading experience. Based on the answers provided, the Company has implemented a risk scoring matrix which is verified by the Back-Office Officer prior to the categorisation of the client in order to assess the level of leverage of the client. Following the categorisation of the client, an email informing the client of his/her categorisation is duly sent by the Company informing him/her about the opening of his/her account.
8. Record keeping procedures
Pursuant to the provisions of the Anti-Money Laundering and combating Terrorist Financing Regulatory Framework, the Company is obliged to record all information recording its clients including accepted and rejected clients and all documents regarding them for a period of 5 years from the termination of the business relationship with the Company and/or for a longer period of time if this is deemed to be necessary and/or indicated by the Competent Authorities but not longer than 7 years. Each client of the Company obtains an identification number following his/her registration and a designated file is created which includes any documentation obtained, created and/or relevant.
The Company will document its verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancy in the identifying information. The Company shall further maintain records of all documents relied upon for the verification of the identity of clients and/or prospective clients.
9. Duty to Report
There is a statutory and regulatory obligation on the Company and its employees and all related associates i.e. Tied Agent, Branch to report information which comes to their attention, which gives rise to knowledge of suspicion or reasonable grounds for knowledge or suspicion of money laundering. Thus, even if a member of the employees of the Company does not actually know or suspect but reasonably should have known or suspected, and does not report, he/she would be committing an offence. To this end, continuous surveillance for suspicious transactions must be carried out. Knowing its customers is the Company’s most important line of defence in preventing or detecting money laundering activities.
10. Suspicious Transactions
A suspicious transaction will often be one which is inconsistent with a customer’s known legitimate business. Emphasis will therefore be placed on knowing the customer’s business and his / her requirements. To this effect the Compliance Officer of the Company maintains
a clients’ record where all the documentation regarding the clients is maintained
while performing random inspections in order to identity any inconsistencies in the information provided and the transactions of clients.
The following questions may help to determine whether a transaction is suspicious:
- Is it inconsistent with the client’s known activities?
- Is the size of the transaction consistent with the client’s norm?
- Are there any other transactions linked to the transaction in question of which the Company is aware and which could be designed to disguise money and divert it into other forms or other destinations or beneficiaries?
- Has the client’s pattern of transaction changed?
Suspicions of money laundering, however minor, should be discussed immediately with the Compliance Officer of the Company following the internal policies and procedures of the Company as communicated to all the employees of the Company.