Anti-Money Laundering (AML) Policy - AlfaTradersFX

2.1 Identity Verification

We believe that proper identification of our customers is the cornerstone of any effective AML program. As part of our KYC processes, all users must supply the following documentation to verify their identity and legitimacy of funds:

• Valid government-issued photo identification: This includes passports, driver’s licenses, or national ID cards with a recognizable photograph and clearly indicated expiration date.
• Proof of residence: Acceptable documents consist of recent utility bills, bank statements, or other official correspondence that clearly displays the user’s full name and current address.
• Clear facial photograph: Users must submit a clear and recent digital headshot to ensure consistency with the photo on their government ID.
• Additional documentation (as required): For enhanced due diligence, we may request further evidence of identity or source of funds, especially for customers in higher-risk categories.

2.2 Verification Tiers

Our multi-tiered verification process is designed to tailor account privileges according to each user’s risk profile and level of submitted documentation:

• Basic Tier: Offers limited functionality after providing essential KYC details. This tier is ideal for users engaging in lower-volume trades.
• Intermediate Tier: Requires additional documentation, such as proof of address or supplementary ID checks. This tier allows greater transaction volumes and additional Platform features.
• Advanced Tier: Demands comprehensive background information and enhanced verification steps, including detailed financial data, for users conducting large or high-frequency trades.
• Corporate Accounts: Requires appropriate company documentation (e.g., corporate registration, ownership details, and authorized signatory information) to verify the business entity and its legitimate activities.

3.1 Monitoring Systems

We employ a range of specialized tools and automated processes to proactively track and evaluate user transactions. These systems help us identify unusual behavior and reduce the risk of undetected illicit activities:

• Real-time transaction screening: Continuously checks transactions against risk indicators and watchlists.
• Pattern recognition algorithms: Identifies consistent transaction behaviors and flags anomalies that may point to suspicious activities.
• Risk scoring system: Assigns each user and transaction a risk score based on various parameters, including transaction size, frequency, and jurisdiction.
• Automated flagging system: Generates alerts for transactions that exceed predefined risk thresholds, prompting compliance staff review.
• Behavioral analysis: Monitors changes in user behavior, such as sudden spikes in volume, or shifts in asset usage, that might indicate wrongdoing.

3.2 Suspicious Activities

Our transaction monitoring systems and compliance staff remain vigilant to detect red flags and unusual activities that could signal money laundering or other financial crimes:

• Unusual transaction patterns: Sequences of transactions lacking a clear economic purpose or inconsistent with a user’s typical history.
• Multiple accounts under one identity: Attempts to bypass trading limits or evade detection by creating accounts under slightly varied credentials.
• Structured transactions: Deliberately splitting a larger transaction into smaller increments to avoid standard reporting thresholds.
• High-risk jurisdictions: Originations or destinations involving countries with weak AML regulations or known for elevated risk.
• Irregular trading patterns: Sporadic, high-volume trades that do not correlate with typical market factors.
• Unusual sources of funds: Inconsistent or opaque descriptions of how funds were acquired, particularly if they appear out of alignment with the user’s stated background or income.

4.1 Customer Risk Factors

We rely on a structured risk assessment framework to categorize our customers and better understand where AML risks may be most pronounced. Key factors that guide our evaluation include:

• Geographic location: Countries of origin or residency can highlight potentially higher risks if they have lax or inconsistent AML regulations.
• Transaction history: Past activity on the Platform or documented financial behavior can indicate unusual patterns warranting extra scrutiny.
• Account activity patterns: Frequency, volume, and types of trades help determine whether user behavior aligns with their stated profile.
• Source of funds: Verification of where the user’s capital originates (e.g., salary, business revenue) is crucial to rule out illicit sources.
• Business type (for corporate accounts): The nature of a company’s industry can impact its inherent risk level, particularly if it is cash-intensive or based in a high-risk sector.
• Political exposure status: Politically Exposed Persons (PEPs) and their associates present higher risks due to potential access to public funds or influence.

4.2 Enhanced Due Diligence

When a customer’s risk level is determined to be above the standard threshold, we initiate a more intensive review process. Enhanced Due Diligence (EDD) might involve requesting further proof of identification, verifying sources of wealth, or involving senior compliance personnel:

• High-volume traders: Accounts with substantial trading frequencies or significant capital flows are subject to a closer examination of their background and financial activities.
• Politically exposed persons (PEPs): Extra scrutiny ensures that PEPs cannot exploit their influence for illegitimate transactions.
• High-risk jurisdictions: Users connecting from regions with prevalent financial crimes or lenient regulations face stricter verification protocols.
• Complex corporate structures: Layered corporate relationships or unclear ownership structures raise red flags, prompting more transparent disclosure and investigative measures.
• Unusual transaction patterns: Abrupt or unexplained shifts in trading routines necessitate increased scrutiny to validate legitimacy.

• Minimum 5-year retention period: All KYC documents, transaction logs, and related records are stored for at least five years from the date of a customer’s last activity.
• Secure database storage: Transactions are kept in a protected database with restricted access levels, ensuring data confidentiality and integrity.
• Archived KYC documentation: Sensitive customer information is encrypted and stored securely for the required retention timeframe.
• Compliance reports and investigations: All inquiries, audits, and reviews are documented, along with findings and outcomes.
• Training records: Employee training logs are maintained to verify that relevant staff have received ongoing AML education.
• Audit trails: We keep a detailed history of all compliance actions, which can be referenced during regulatory inspections.

6.1 Training Requirements

We believe that continuous employee education is essential in preventing, detecting, and reporting financial crimes. To this end, AlfaTradersFX mandates:

• Initial AML training: All new hires must undergo foundational AML training to familiarize themselves with legal requirements and internal procedures.
• Annual refresher courses: Employees receive updated training to keep them current with changes in regulations and emerging threat typologies.
• Role-specific training: Employees with specialized responsibilities (e.g., compliance officers) receive in-depth instruction tailored to their tasks.
• Regulatory updates: We promptly inform staff of any new laws or revisions that may affect our AML measures, ensuring immediate compliance.
• Incident response drills: Staff learn how to recognize and escalate suspicious incidents or policy breaches effectively.

6.2 Compliance Officers

Compliance Officers serve a pivotal role in overseeing AML operations, bridging senior management directives, and ensuring that the entire organization aligns with regulatory expectations:

• Designated AML Compliance Officer: Responsible for overseeing daily AML tasks, coordinating investigations, and managing suspicious activity reports.
• Periodic compliance reviews: Conducts routine checks and internal audits to confirm that procedures meet both internal standards and regulatory requirements.
• Internal audit procedures: Works closely with audit teams to address findings, strengthen controls, and eliminate compliance gaps.
• Reporting to senior management: Provides executive leadership with regular reports on AML developments, risk assessments, and identified issues.
• Regulatory liaison: Serves as the primary contact point for external regulatory bodies, facilitating efficient communication and cooperation during inquiries or examinations.

7.1 Suspicious Activity Reporting

When a transaction or account activity raises concerns about potential money laundering, it must be escalated promptly for further scrutiny. Our reporting structure ensures that appropriate action is taken without delay:

• Immediate internal reporting: Staff must promptly inform the Compliance Officer of any concerning transactions or account behaviors.
• Investigation protocols: A formal investigative process verifies the accuracy and relevance of reported information before filing external reports.
• Documentation requirements: All evidence and findings linked to the suspicious activity are recorded, maintaining a clear audit trail.
• Filing timelines: Regulatory bodies often impose strict reporting deadlines; we strive to submit these reports well within the mandated timeframe.
• Confidentiality standards: We protect the identity of individuals who file internal reports, mitigating potential backlash or compromised safety.

7.2 Regulatory Reporting

Beyond handling specific suspicious events, AlfaTradersFX must also fulfill multiple ongoing obligations to ensure our overall AML approach meets or exceeds regulatory expectations:

• Periodic compliance reports: We regularly compile information on our AML practices, changes to policies, and risk assessments for submission to relevant authorities.
• Incident reports: Detailed accounts of any confirmed or attempted financial crime are provided to regulators, ensuring complete transparency.
• Annual audits: External or internal audits assess the strength and effectiveness of our AML controls, culminating in a formal report.
• Regulatory examinations: We cooperate fully with scheduled or unannounced inspections, offering access to records, staff, and systems as needed.
• Government inquiries: AlfaTradersFX promptly responds to inquiries from government bodies or law enforcement agencies, delivering accurate and timely information.