PMLA / AML-CFT Policy

Algolytical Investment Adviser (hereinafter referred to as “the Firm”, “the IA”, “We”, “Our” or “Us”) is a sole proprietorship firm and is registered with the Securities and Exchange Board of India (“SEBI”) as an Individual Investment Adviser vide Registration No. INA000020138 and is enlisted on the BSE Limited vide Enlistment No. 2260.

The Prevention of Money Laundering Act, 2002 (“PMLA”) was brought into force with effect from 1st July 2005. The necessary Notifications / Rules under the said Act, namely the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 (“PML Rules”), were published in the Gazette of India on 1st July 2005 by the Department of Revenue, Ministry of Finance, Government of India, and have been amended from time to time (including the amendments notified in 2023).

Pursuant to the recommendations made by the Financial Action Task Force (“FATF”) on Anti-Money Laundering standards, SEBI has issued, and updates from time to time, guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT). The currently applicable consolidated guidance is the SEBI Master Circular on “Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) / Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules framed thereunder” dated 06 June 2024 (No. SEBI/HO/MIRSD/MIRSD-SECFATF/P/CIR/2024/78) (the “SEBI AML Master Circular”). The SEBI Master Circular for Investment Advisers dated 06 February 2026 (No. HO/38/12/11(2)2026-MIRSDPOD/I/4300/2026) read with the SEBI (Investment Advisers) Regulations, 2013 (“IA Regulations”) requires every registered Investment Adviser, being an intermediary registered under Section 12 of the SEBI Act, 1992, to put in place an effective AML/CFT framework in line with these guidelines.

Algolytical Investment Adviser has formulated this Policy on Prevention of Money Laundering and an effective AML/CFT programme to prohibit and actively prevent money laundering, terrorist financing and any activity that facilitates money laundering, the funding of terrorist or criminal activities, the flow of illegal money, or the concealment of money to avoid the payment of taxes. Money laundering may be defined as engaging in financial transactions that involve income derived from criminal activity, or transactions designed to conceal the true origin of criminally derived proceeds so that they appear to have been received through legitimate sources.

This Policy applies to the Firm, its proprietor, staff, authorised persons, and persons associated with the investment advice, as well as to any affiliate, authorised representative or third-party service provider acting on its behalf, in accordance with the statutory provisions of the PMLA, the PML Rules, the SEBI AML Master Circular, the IA Regulations and the SEBI KYC (Know Your Client) norms, and is to be read in conjunction with the existing guidelines, as amended from time to time. The procedures set out below have been established to ensure that all persons engaged with the Firm know the identity of their clients and take appropriate steps to combat money laundering and terrorist financing.

The objective of this Policy framework is to:

• Create awareness and provide clarity on KYC standards and AML/CFT measures;
• Establish a proper Customer Due Diligence (CDD) process before onboarding clients;
• Monitor and maintain records of all cash transactions of value exceeding INR 10 lakh;
• Maintain records of all series of integrally connected cash transactions where the monthly aggregate exceeds INR 10 lakh within one calendar month;
• Monitor, detect and report suspicious transactions to FIU-IND;
• Discourage and identify money laundering and terrorist financing activities;
• Take adequate and appropriate measures to follow the letter and spirit of the PMLA, the PML Rules and the SEBI AML Master Circular.

As a reporting entity under the PMLA, the Firm is required under Rule 7 of the PML Rules to communicate to the Director, FIU-IND, the name, designation and address of the “Principal Officer”.

In terms of Rule 2(1)(f) of the PML Rules, the “Principal Officer” means an officer (provided that such officer shall be an officer at the management level) designated by the reporting entity for furnishing information to the Director, FIU-IND.

Mr. ROHIT GUPTA, Proprietor of Algolytical Investment Adviser, has been designated as the Principal Officer. The Principal Officer is responsible for:

• Ensuring the filing of necessary reports with the Financial Intelligence Unit-India (FIU-IND);
• Acting as the central reference point in facilitating onward reporting of suspicious transactions;
• Playing an active role in the identification and assessment of potentially suspicious transactions; and
• Overseeing the day-to-day implementation of this Policy and ensuring overall compliance with the obligations imposed under the PMLA and the PML Rules.

All matters concerning the issues covered by this Policy shall be directed to the Principal Officer, who shall be responsible for maintaining and updating all records in accordance with this Policy and applicable law/regulation. The Principal Officer shall discharge the functions with the requisite authority and independence. The name, designation and address (including email address) of the Principal Officer, including any changes therein, shall be intimated to the Office of the Director, FIU-IND.

Mr. ROHIT GUPTA, as the sole proprietor, bears ultimate responsibility for the AML/CFT framework of Algolytical Investment Adviser. In discharging this responsibility, the Proprietor shall:

• Approve this Policy and any material amendments to it;
• Ensure that adequate resources, systems and controls are in place to enable compliance with the PMLA, the PML Rules and the SEBI AML Master Circular;
• Review, at least annually, the adequacy and effectiveness of the AML/CFT framework, the enterprise-level money laundering and terrorist financing risk assessment, and the implementation of this Policy; and
• Foster a culture of compliance throughout the Firm.

Algolytical Investment Adviser has resolved that it would, as an internal policy, take adequate measures to prevent money laundering and terrorist financing, and shall put in place a framework for identifying, monitoring and reporting suspected money laundering or terrorist financing transactions to FIU-IND in accordance with the PMLA, the PML Rules and the SEBI AML Master Circular. The Firm shall regularly review the policies and procedures relating to AML and CFT to ensure their continued effectiveness.

The Principal Officer shall ensure overall compliance with the obligations imposed under the PMLA and the PML Rules, the filing of necessary reports with FIU-IND, and shall act as the central reference point in facilitating onward reporting of suspicious transactions, and in the identification and assessment of potentially suspicious transactions. The Principal Officer shall have access to, and be able to report to, the Proprietor as the ultimate governing authority.

• Obtaining sufficient information about the client in order to identify the natural person(s) who is/are the beneficial owner(s) of the securities, or on whose behalf the transaction is conducted, including persons who exercise ultimate effective control over a legal person or arrangement;
• Verifying the client’s identity using reliable, independent source documents, data or information; and
• Conducting ongoing due diligence and scrutiny of the client account to ensure that the transactions conducted are consistent with the client’s background, financial status, activities and risk profile.

The Customer Due Diligence (CDD) process includes three specific parameters:

• Policy for Acceptance of Clients;
• Client Identification Procedure; and
• Suspicious Transactions identification and reporting.

The Firm shall accept only those clients whose identity it is able to verify in accordance with the prescribed KYC norms. Verification may be carried out through in-person interaction, video / online KYC, or any other SEBI-approved mode, and through KYC Registration Agencies (KRAs) and the Central KYC Records Registry (CKYCR).

The Firm shall ensure that:

• No account / client relationship is established on a fictitious, benami or anonymous basis;
• All initial forms taken from clients are filled in completely, and all photocopies submitted are checked against original documents without exception;
• All supporting documents specified by SEBI and the applicable KYC norms are obtained and verified;
• A detailed search is carried out to ensure that the client does not appear in the defaulters / negative lists of regulators, or any sanctions or designated-persons list;
• Clients whose identity matches any person with a known criminal background, or who is banned in any manner (whether in terms of criminal or civil proceedings by any enforcement / regulatory agency worldwide), are not accepted.

In the case of a Non-Resident Indian (NRI) client whom the Firm is unable to verify in person, the photocopies of all KYC documents and the PAN card shall be attested by the Indian Embassy / Consulate General in the country where the NRI resides, or otherwise verified in accordance with the prevailing guidelines, and shall be signed by the NRI. Such attestation may be waived where the NRI comes in person.

The KYC team / Principal Officer shall, before admitting any person as a client, check (the following list being indicative and not exhaustive):

• https://www.fatf-gafi.org/en/home.html (FATF public statements / high-risk jurisdictions);
• https://www.un.org/securitycouncil/content/un-sc-consolidated-list (UNSC Consolidated List);
• https://www.watchoutinvestors.com (Watch-Out Investors database);
• Data available on SEBI and other relevant enforcement / regulatory websites; and
• Any other database available at the prevailing time.

Where the Firm is unable to apply appropriate CDD measures — for example where it is not possible to ascertain the identity of the client, where information provided is suspected to be non-genuine, or where the client is non-cooperative — then no account shall be opened. In such cases the Firm shall consider filing a Suspicious Transaction Report (STR) and shall be cautious to ensure that it does not return securities or money that may be derived from suspicious activity, consulting the relevant authorities as appropriate.

Enhanced caution and Enhanced Due Diligence (EDD) shall be exercised while accepting clients of the following special categories:

• Non-Resident clients (NRIs / PIOs);
• High Net-worth clients (clients having an annual income of INR 25 lakh or more, or a net worth of INR 10 crore or more);
• Trusts, charities, Non-Governmental Organisations (NGOs) and organisations receiving donations;
• Companies having close family shareholdings or beneficial ownership;
• Politically Exposed Persons (PEPs) – individuals who are or have been entrusted with prominent public functions in a foreign country (e.g., Heads of State or Government, senior politicians, senior government / judicial / military officers, senior executives of state-owned corporations, important political party officials), and the family members or close relatives of such PEPs;
• Companies offering foreign exchange;
• Clients in or from high-risk countries / jurisdictions (as per the latest FATF and Government of India data) where the existence or effectiveness of money laundering controls is suspect, where there is unusual banking secrecy, countries active in narcotics production, countries with high corruption (per the Transparency International Corruption Perception Index), countries against which government sanctions are applied, and countries reputed to be sponsors of international terrorism, offshore financial centres, tax havens, or where fraud is highly prevalent;
• Clients with a dubious reputation as per public information available;
• Non-face-to-face clients, shell companies, and overseas entities.

For client relationships, and particularly for non-individual clients, sufficient information shall be obtained as part of CDD to identify and verify the natural person(s) who ultimately own or control the client and/or the person(s) on whose behalf a transaction is conducted (the “beneficial owner”). This includes persons who exercise ultimate effective control over a legal person or arrangement. Where it is apparent that securities are beneficially owned by a party other than the client, that party shall be identified and verified as early as possible.

In line with Rule 9 of the PML Rules (as amended in 2023) and the SEBI AML / KYC Master Circulars, the beneficial owner shall be determined as follows:

• No client registration form suspected to be fictitious shall be accepted, and no account shall be opened in a fictitious, benami or anonymous name;
• There shall be no compromise on the submission of mandatory information / documents; the client relationship shall be established only on receipt of mandatory information together with authentic supporting documents; and
• Where a client refuses to provide the required information / documents, the relationship shall not be established and the Firm shall consider whether such reluctance gives rise to a suspicion warranting an STR.

A mechanism shall be in place to establish the identity of every client, together with firm proof of address, so as to prevent the opening of any account that is fictitious, benami or anonymous in nature.

13.1 Documents that may be relied upon

• PAN Card: PAN is mandatory and is the most reliable document, as only one card is issued to a person and its genuineness can be independently verified through the Income Tax website.
• Proof of Address: A Voter’s Identity Card, Passport, Aadhaar (in the manner permitted by law), bank statement, or latest electricity / telephone bill in the name of the client, among other officially valid documents (OVDs).

13.2 Documents to be obtained for non-individual clients

The following documents shall be obtained as part of the CIP for non-individual clients (the list is illustrative; the actual requirement will depend on the prevailing KYC guidelines):

The Firm shall carry out and document a money laundering and terrorist financing risk assessment so as to identify, assess and take effective measures to mitigate its risk with respect to clients, countries or geographical areas, nature and volume of transactions, products / services, and payment methods used by clients. The risk assessment shall take into account country-specific information circulated by the Government of India and SEBI from time to time, as well as the updated list of individuals and entities subjected to sanctions under the various United Nations Security Council Resolutions (UNSCRs).

The level of money laundering risk to which the Firm is exposed through a client relationship depends, among other things, on the type of client and nature of business, the type of product / service availed, and the country in which the client is domiciled. On this basis, clients shall be classified into three categories i.e. High Risk, Medium Risk and Low Risk, applying a risk-based approach.

The Firm shall periodically review the risk categorisation of clients and the need for applying Enhanced Due Diligence (EDD) where a higher risk is perceived. High-risk clients shall be reviewed at least once every six months, while medium-risk and low-risk clients shall be reviewed at least once a year. For high-risk clients, including PEPs and clients from high-risk jurisdictions, additional information shall be collected and verified (including the source of funds / wealth), and their transactions shall be subject to enhanced monitoring.

The following safeguards shall be observed while accepting and dealing with clients:

• No client account shall be opened in a fictitious / benami name or on an anonymous basis;
• The risk perception of the client shall be defined having regard to the client’s location, nature of business activity and turnover, and the manner of making payments;
• Documentation prescribed by SEBI and other regulatory authorities (KYC, agreement, risk profiling, suitability and other records) shall be collected having regard to the perceived risk and the requirements of the PMLA;
• Where the Firm is unable to apply appropriate CDD / KYC measures, the relationship shall not be established, and the Firm shall consider filing an STR; and
• Where a client is permitted to act on behalf of another person / entity, the manner of operation, transaction limits and the rights and responsibilities of both parties shall be clearly specified, and the authority of the person acting on behalf of the client shall be adequately verified.

• The Firm shall regularly monitor client transactions to identify any deviation in transactions / activity, so as to ensure the effectiveness of the AML procedures;
• Special attention shall be paid to all unusually large transactions and unusual patterns which appear to have no apparent economic rationale or bona fide purpose;
• The Firm may specify internal threshold limits for each class of client and shall pay special attention to transactions exceeding such limits;
• The background, including all documents / office records / clarifications relating to such transactions and the purpose thereof, shall be examined carefully, and the findings recorded in writing. Such findings, records and related documents shall be made available to the auditors and to SEBI / FIU-IND / other relevant authorities during audit, inspection or as and when required, and shall be maintained and preserved for the period prescribed under the PMLA.

The Firm shall not accept cash from clients under any circumstances. In line with the IA Regulations and the SEBI AML Master Circular, all fees and other considerations shall be received only from the client, strictly by account-payee crossed cheque / demand draft, or by direct credit to the bank account through NEFT / RTGS / IMPS / Verified UPI or any other mode specified by SEBI from time to time. The Firm shall not accept cash deposits.

Where payment is received from a bank account other than the one captured in the records, the same may be accepted only after ascertaining that the client is the first holder of that account. In exceptional cases, a bank draft / pay-order may be accepted only after verifying that the identity of the remitter / purchaser matches that of the client, failing which a certificate from the issuing bank shall be obtained.

The Firm may rely on a third party for the purpose of (i) identification and verification of the identity of a client, (ii) determination of whether the client is acting on behalf of a beneficial owner and identification of the beneficial owner, and (iii) verification of the identity of the beneficial owner. Such third party shall be regulated, supervised or monitored for, and have measures in place for compliance with, CDD and record-keeping requirements in line with the obligations under the PMLA. Such reliance shall be subject to the conditions specified in Rule 9(2) of the PML Rules and the SEBI circulars / guidelines issued from time to time. It is clarified that the Firm shall remain ultimately responsible for CDD and for undertaking enhanced due diligence measures, as applicable.

The Firm shall comply with the record-keeping requirements contained in the SEBI Act, 1992, the IA Regulations, the PMLA and the PML Rules, and other applicable laws. In particular, the Firm shall maintain proper records of the transactions prescribed under Rule 3 of the PML Rules, namely:

• All cash transactions of the value of more than INR 10 lakh, or its equivalent in foreign currency;
• All series of cash transactions integrally connected to each other, which have been individually valued below INR 10 lakh, where such series of transactions takes place within one calendar month and the monthly aggregate exceeds INR 10 lakh, or its equivalent in foreign currency;
• All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine, or where any forgery of a valuable security or document has taken place facilitating the transaction; and
• All suspicious transactions, whether or not made in cash, as referred to in the PML Rules.

18.1 Retention of records

In accordance with Section 12 of the PMLA read with Rule 6 of the PML Rules, the following retention terms shall be observed:

• Records of all transactions referred to in Rule 3 (and the records of information reported to FIU-IND) shall be maintained and preserved for a period of five years from the date of the transaction between the client and the Firm;
• Records pertaining to client identification and CDD (such as copies of officially valid documents, account files and business correspondence) shall be maintained and preserved for a period of five years after the business relationship between the client and the Firm has ended, or the account has been closed, whichever is later;
• Records shall be maintained in both hard and soft copies in a manner that allows easy and quick retrieval of data as and when requested by the competent authorities; and
• The confidentiality of records shall be maintained, and where an STR has been or is to be filed, the client shall not be told of the report or the suspicion (“no tipping off”).

Note: The retention period prescribed under the PMLA is five years; some legacy intermediary documents reference ten years. This Policy adopts the statutory five-year period as currently prescribed under the PMLA and the PML Rules.

The Firm shall, on an ongoing basis, monitor client transactions and circumstances in order to ascertain whether they are “suspicious” and therefore reportable to FIU-IND. A suspicious transaction is one which, to a person acting in good faith:

• Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime, irrespective of the value involved;
• Appears to be made in circumstances of unusual or unjustified complexity;
• Appears to have no economic rationale or bona fide purpose; or
• Gives rise to a reasonable ground of suspicion that it may involve the financing of activities relating to terrorism.

19.1 Indicators / criteria for ascertaining suspicious transactions

• Clients whose identity verification is difficult, or who are non-cooperative in providing information;
• Clients belonging to, or introduced by persons / entities in, high-risk countries;
• An increase in a client’s business without an apparent justification, or turnover not commensurate with the client’s financial standing;
• Unusually large cash deposits, or overseas receipts / payments of funds, with or without instructions to pay in cash;
• Transfer of proceeds to unrelated parties, negotiated / matched trades, or other transactions with no apparent economic purpose;
• Clients making huge and regular losses who nonetheless continue to place trades / orders, and where the source of funds is unclear;
• Asset management or advisory services for clients where the source of funds is not clear or not consistent with the client’s apparent standing / business activity; and
• Unusual transactions undertaken by clients of special categories, or clients based in high-risk jurisdictions.

The Principal Officer shall record, in writing, the reasons for treating any transaction or series of transactions as suspicious, and shall ensure that there is no undue delay in arriving at such a conclusion.

The Firm shall maintain and preserve the records of information relating to transactions, whether attempted or executed, that are reported to the Director, FIU-IND, as required under Rules 7 and 8 of the PML Rules, for a period of five years from the date of the transaction between the client and the Firm.

An updated list of individuals and entities that are subject to various sanction measures such as freezing of assets / accounts and denial of financial services as approved by the Security Council Committees established pursuant to various United Nations Security Council Resolutions (UNSCRs) is available on the UN website. The Firm shall ensure that no account / client relationship is established in the name of anyone whose name appears in such list, and shall continuously scan all existing client relationships to ensure that none is held by or linked to any of the entities or individuals included in the list. Full details of any client bearing resemblance to any individual / entity in the list shall immediately be intimated to SEBI and FIU-IND.

Section 51A of the Unlawful Activities (Prevention) Act, 1967 (“UAPA”), relating to the prevention of money laundering and the financing of terrorism, was brought into effect through the UAPA (Amendment) Act, 2008. In this regard, the Central Government has issued an Order dated 02 February 2021 (which supersedes the earlier Order dated 27 August 2009), detailing the procedure for the implementation of Section 51A of the UAPA, read with the relevant SEBI circular (including No. SEBI/HO/MIRSD/DOP/CIR/P/2021/36 dated 25 March 2021).

Under the said provisions, the Central Government is empowered to freeze, seize or attach funds and other financial assets or economic resources held by, on behalf of, or at the direction of the individuals or entities listed in the Schedule to the Order, or any other person engaged in or suspected to be engaged in terrorism, and to prohibit any individual or entity from making any funds, financial assets, economic resources or related services available for the benefit of such listed individuals or entities. The Firm shall ensure the effective and expeditious implementation of the procedure laid down in the said UAPA Order.

In terms of the PML Rules, the Firm is required to report information relating to cash and suspicious transactions to the Director, FIU-IND, at the following address:

Director, FIU-IND,
Financial Intelligence Unit-India, 6th Floor,
Hotel Samrat, Chanakyapuri, New Delhi – 110021.
Website: https://fiuindia.gov.in/

The Firm shall carefully follow all reporting requirements and formats available on the FIU-IND website under the section “Obligation of Reporting Entity – Furnishing Information – Reporting Format”, and shall file reports electronically through the FINnet / FINGate portal in the prescribed formats and data structures.

• The Cash Transaction Report (CTR), wherever applicable, for each month shall be submitted to FIU-IND by the 15th of the succeeding month;
• The Suspicious Transaction Report (STR) shall be submitted within 7 working days of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of integrally connected transactions, is of a suspicious nature;
• The Non-Profit Organisation Transaction Report (NTR) for each month shall be submitted to FIU-IND by the 15th of the succeeding month;
• The Principal Officer shall be responsible for the timely submission of the CTR, STR and NTR to FIU-IND, and utmost confidentiality shall be maintained in filing such reports;
• No “nil” reporting is required where there are no cash / suspicious / non-profit organisation transactions to be reported; and
• No restriction shall be placed on operations in an account merely because an STR has been filed. The Firm, its proprietor and staff (permanent and temporary) are prohibited from disclosing (“tipping off”) the fact that an STR or related information is being or has been reported. The Firm shall file an STR wherever it has reasonable grounds to believe that a transaction involves the proceeds of crime, irrespective of the amount or any threshold for predicate offences specified in the Schedule to the PMLA.

To ensure that the Firm properly discharges its legal obligations under the PMLA, the following officers have been designated, and their names, designations and addresses (including email addresses), and any changes therein, have been / shall be intimated to the Director, FIU-IND:

The Principal Officer acts as the central reference point for facilitating onward reporting of suspicious transactions and for the identification and assessment of potentially suspicious transactions. Any further information or clarification in this regard may be obtained from the Principal Officer.

26.1 Hiring of employees

The Firm shall have adequate screening procedures in place to ensure high standards when engaging staff or authorised persons. It shall identify the key positions / roles having regard to the risk of money laundering and terrorist financing, and shall ensure that persons taking up such roles are suitable and competent to perform their duties.

26.2 Employee training

The Firm shall maintain an ongoing training programme so that all persons engaged are adequately trained in AML, CFT and related procedures. Training shall have specific focus for persons dealing with clients, compliance functions, and back-office operations, and shall include relevant case studies and examples. All concerned shall fully understand the rationale behind these directives and implement them consistently, and shall be sensitive to the risk of the Firm’s systems being misused.

26.3 Investor education

Implementation of AML measures requires the Firm to demand certain information from clients which may be of a personal nature. There is, therefore, a need to sensitise clients to the fact that such requirements emanate from the AML/CFT framework. The Firm shall prepare and, where appropriate, display on its website specific literature / information to educate clients on the objectives of the AML programme.

The Firm shall further ensure that:

• The content of these directives is understood by all persons associated with the Firm;
• The policies and procedures for the prevention of money laundering are reviewed at least annually to ensure their effectiveness, and that the person carrying out such review is, as far as practicable, different from the person who framed the policies and procedures;
• Client acceptance policies and procedures sensitive to the risk of money laundering are adopted, and CDD measures are undertaken to an extent sensitive to such risk depending on the type of client, business relationship or transaction;
• A system is in place for identifying, monitoring and reporting suspected money laundering or terrorist financing transactions to the relevant authorities;
• Enhanced Due Diligence (EDD) is applied to high-risk clients, including PEPs and non-resident clients from high-risk jurisdictions, and to those engaging in complex or high-value transactions;
• All KYC and transaction data is stored securely, with access restricted to authorised personnel only, and is protected in compliance with applicable data-protection and privacy laws; and
• Awareness and vigilance against money laundering and terrorist financing is continually developed.

This Policy has been approved by the Proprietor of Algolytical Investment Adviser and is effective from the date mentioned herein. It shall be reviewed at least annually and updated as and when required to reflect changes in applicable law and regulation.

Mr. ROHIT GUPTA
Proprietor & Principal Officer
Algolytical Investment Adviser

Date: 01/04/2026
Place: Delhi