PMLA / AML-CFT Policy

1. About the Investment Adviser
2. Introduction
3. Applicability
4. Objective
5. Principal Officer and Point of Contact
6. Individual Responsibility and Governance (In Lieu of Board Oversight)
7. Policy and Procedures to Combat Money Laundering and Terrorist Financing
8. Implementation of the Policy
9. Aspects of the Policy
10. Customer Acceptance Policy
11. Clients of Special Category
12. Identification of Beneficial Ownership
13. Customer Identification Procedure (CIP) / KYC
14. Money Laundering Risk Assessment and Risk Classification
15. Monitoring of Transactions
16. Fees and Cash Transactions
17. Reliance on Third Party for Client Due Diligence
18. Record Keeping and Retention
19. Suspicious Transactions Monitoring and Reporting
20. Records of Information Reported to FIU-IND
21. List of Designated Individuals / Entities (UNSC)
22. Freezing of Funds and Assets under Section 51A of UAPA
23. Reporting to Financial Intelligence Unit-India (FIU-IND)
24. Adherence – Reporting Timelines (CTR / STR / NTR)
25. Designation of Principal Officer for Compliance with PMLA
26. Training and Investor Education
27. Additional Values and Review
28. Adoption

ROHIT GUPTA PROPRIETOR ALGOLYTICAL (hereinafter referred to as “the IA”, “the Investment Adviser”, “We”, “Firm”, “Our” or “Us”) is an Individual Investment Adviser registered with the Securities and Exchange Board of India (“SEBI”) vide Registration No. INA000020138, and enlisted with BSE Limited, the Investment Adviser Administration and Supervisory Body (“IAASB”), vide Enlistment No. 2260. The IA operates in his individual/sole-proprietary capacity and is not a company, partnership or other body corporate; there is accordingly no Board of Directors, and ROHIT GUPTA personally exercises all functions, responsibilities and decision-making that this Policy contemplates.

The Prevention of Money Laundering Act, 2002 (“PMLA”) came into force with effect from 1st July, 2005. The Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 (“PML Rules”) were published under the PMLA 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 of the Financial Action Task Force (“FATF”) on anti-money laundering standards, SEBI has issued the 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 6th June, 2024 (No. SEBI/HO/MIRSD/MIRSD-SECFATF/P/CIR/2024/78) (“SEBI AML Master Circular”). The SEBI Master Circular for Investment Adviser, read with the SEBI (Investment Adviser) Regulations, 2013 (“IA Regulations”), expressly directs every registered Investment Adviser to refer to and comply with the SEBI AML Master Circular and the applicable KYC master circulars, as an intermediary registered under Section 12 of the SEBI Act, 1992.

The IA has formulated this Policy on Prevention of Money Laundering and an 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 payment of taxes. Money laundering may be described 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 ROHIT GUPTA personally, and to any associate or person associated with his Advisory services, and to any authorised representative or third-party service provider acting on his behalf, in accordance with the PMLA, the PML Rules, the SEBI AML Master Circular, the IA Regulations, the Master Circular for Investment Adviser, and applicable SEBI KYC norms, read together and as amended from time to time. The procedures below are established to ensure that the IA knows the identity of every client and takes appropriate steps to combat money laundering and terrorist financing.

• Create awareness and clarity on KYC standards and AML/CFT measures applicable to the IA’s practice;
• Establish a proper Customer Due Diligence (CDD) process before onboarding any client;
• Monitor and maintain records of any cash transaction of value exceeding ₹10 lakh, and of any series of integrally connected cash transactions whose monthly aggregate exceeds ₹10 lakh (noting that, as set out in Clause 16, the IA does not in practice accept cash from clients at all);
• Monitor, detect and report suspicious transactions to FIU-IND;
• Discourage and identify money laundering and terrorist financing activity in relation to the IA’s practice; and
• 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 IA is required under Rule 7 of the PML Rules to communicate to the Director, FIU-IND, the name, designation and address of a “Principal Officer”. In terms of Rule 2(1)(ba) of the PML Rules, a “Designated Director” is, in the case of a company, the Managing Director or a whole-time director authorised by the Board of Directors; since the IA operates in an individual/sole-proprietary capacity with no Board of Directors, there is no separate Designated Director to be appointed, and ROHIT GUPTA himself performs, in his personal capacity, both the overall-compliance-oversight role that a Designated Director would perform for a corporate entity and the day-to-day role of Principal Officer under Rule 2(1)(f) of the PML Rules.

ROHIT GUPTA is accordingly designated as the sole Principal Officer and point of contact for all PMLA/AML-CFT matters, at all places and for all purposes connected with the IA’s practice. He is responsible for: overseeing day-to-day implementation of this Policy; ensuring the filing of necessary reports with FIU-IND; acting as the central reference point for onward reporting of suspicious transactions; and the identification and assessment of potentially suspicious transactions. As the IA is an individual, all client-facing communication, internal escalation and regulatory correspondence on AML/CFT matters converge in the same person, and no separate internal reporting line, escalation matrix or Board of Directors is applicable or required.

The name, designation, address and email address of the Principal Officer, and any change therein, shall be intimated to the Office of the Director, FIU-IND, as required under the PML Rules.

As the IA is an Individual Investment Adviser and not a company, there is no Board of Directors and no requirement for a board resolution to approve, adopt or amend this Policy. ROHIT GUPTA bears, in his personal capacity, the ultimate and sole responsibility for the AML/CFT framework set out in this Policy. In discharging this responsibility, he shall:

• Personally consider, approve and adopt this Policy and any material amendment to it, by way of a dated, signed adoption (as recorded in Clause 28), without requirement of a board resolution or any corporate governance formality;
• Ensure that adequate resources, systems and controls are in place and personally maintained to enable compliance with the PMLA, the PML Rules and the SEBI AML Master Circular;
• Personally review, at least annually, the adequacy and effectiveness of this AML/CFT framework, the money-laundering/terrorist-financing risk assessment applicable to his practice, and the implementation of this Policy; and
• Maintain personal vigilance and a culture of compliance in the conduct of his Advisory practice.

ROHIT GUPTA has resolved, as an internal policy, to take adequate measures to prevent money laundering and terrorist financing, and to 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. This Policy and the underlying procedures shall be reviewed regularly to ensure continued effectiveness.

As Principal Officer, ROHIT GUPTA shall ensure overall compliance with the obligations imposed under the PMLA and the PML Rules, shall ensure the filing of necessary reports with FIU-IND, and shall act as the central reference point for onward reporting of suspicious transactions and for the identification and assessment of potentially suspicious transactions. Since there is no senior management layer or Board above the IA, he is also the final point of escalation and decision-making on all such matters.

• Obtaining sufficient information about each client to identify the natural person(s) who is/are the beneficial owner(s), or on whose behalf a service is availed, including persons exercising 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 relationship to ensure that engagement with the client is consistent with the client’s background, financial status, activity and risk profile.

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

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

The IA shall onboard, as a fee-paying client, only those persons whose identity he is able to verify in accordance with 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 IA shall ensure that:

• No client relationship is established on a fictitious, benami or anonymous basis;
• All onboarding forms taken from clients are filled in completely, and any copies of documents submitted are checked against originals without exception;
• All supporting documents specified by SEBI and applicable KYC norms are obtained and verified;
• A check is carried out to ensure the client does not appear on any defaulters/negative list of regulators, or any sanctions or designated-persons list; and
• Clients whose identity matches a person of known criminal background, or who is banned in any manner by any enforcement/regulatory agency worldwide, are not accepted.

For a Non-Resident Indian (NRI) client whom the IA is unable to verify in person, photocopies of KYC documents and the PAN card shall be attested by the Indian Embassy/Consulate General in the country of residence, or otherwise verified per prevailing guidelines, and signed by the NRI; such attestation may be waived where the NRI appears in person.

Before admitting any person as a client, the IA shall check (this list being indicative, not exhaustive):

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

Where the IA is unable to apply appropriate CDD measures — for example, where the client’s identity cannot be ascertained, information provided is suspected non-genuine, or the client is non-cooperative — the client relationship shall not be established. In such cases the IA shall consider filing a Suspicious Transaction Report (STR) and shall be cautious not to return any fee or consideration that may be derived from suspicious activity, consulting the relevant authorities as appropriate.

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

• Non-Resident clients (NRIs/PIOs);
• High Net-worth clients (annual income of ₹25 lakh or more, or net worth of ₹10 crore or more);
• Trusts, charities, Non-Governmental Organisations (NGOs) and organisations receiving donations;
• Companies with 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/Government, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials), and their family members/close relatives;
• Companies offering foreign exchange;
• Clients in or from high-risk countries/jurisdictions (per the latest FATF and Government of India data), including jurisdictions with weak money-laundering controls, unusual banking secrecy, high narcotics production or corruption, government sanctions, links to international terrorism financing, offshore financial centres, tax havens, or high fraud prevalence;
• Clients with a dubious reputation per public information; and
• 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:

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

13.1 Documents relied upon

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

13.2 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 IA 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 IA 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 IA 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 IA is unable to apply appropriate CDD / KYC measures, the relationship shall not be established, and the IA 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 IA shall regularly monitor client fee payments and engagement patterns to identify any deviation, so as to ensure the effectiveness of AML procedures;
• Special attention shall be paid to unusually large payments or unusual patterns with no apparent economic rationale or bona fide purpose;
• The IA may apply internal threshold limits and shall pay special attention to payments exceeding such limits; and
• The background of any such payment, including supporting documents/clarifications and its purpose, shall be examined and findings recorded in writing. Such findings and records shall be made available to auditors, SEBI, IAASB and FIU-IND during audit, inspection, or as required, and preserved for the period prescribed under the PMLA.

The IA shall not accept cash from clients under any circumstances. In line with the IA Regulations and the Master Circular for Investment Adviser, all fees shall be received only from the client, strictly through banking channels — account-payee cheque, demand draft, or direct credit via NEFT/RTGS/IMPS/verified UPI, or any other mode specified by SEBI from time to time (including the optional Centralized Fee Collection Mechanism, CeFCoM). No cash deposits shall be accepted, and advance fee collection shall not exceed one quarter, per the fee cap applicable to the IA under the IA Regulations.

Where payment is received from a bank account other than the one on record, it may be accepted only after ascertaining that the client is the first holder of that account. A bank draft/pay-order may be accepted only after verifying that the identity of the remitter matches the client, failing which a certificate from the issuing bank shall be obtained. Notwithstanding that the IA does not accept cash, the IA shall maintain the capability to identify and report any cash transaction exceeding ₹10 lakh (or connected transactions aggregating above that threshold in a month) as required under Rule 3 of the PML Rules, should such a situation ever arise.

The IA may rely on a third party (such as a KYC Registration Agency) for (i) identification and verification of a client’s identity, (ii) determining whether the client acts on behalf of a beneficial owner and identifying that owner, and (iii) verifying the beneficial owner’s identity, provided such third party is regulated, supervised or monitored for, and has measures in place for compliance with, CDD and record-keeping requirements consistent with the PMLA. Such reliance is subject to Rule 9(2) of the PML Rules and applicable SEBI circulars; the IA nonetheless remains ultimately responsible for CDD and for undertaking enhanced due diligence, as applicable.

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

• All cash transactions of value more than ₹10 lakh, or its equivalent in foreign currency;
• All series of integrally connected cash transactions, individually valued below ₹10 lakh, where the series occurs within one calendar month and the monthly aggregate exceeds ₹10 lakh;
• All cash transactions involving forged/counterfeit currency notes, or forgery of a valuable security/document facilitating the transaction; and
• All suspicious transactions, whether or not in cash.

18.1 Retention of Records

In accordance with Section 12 of the PMLA read with Rule 6 of the PML Rules:

• Records of transactions under Rule 3 (and records of information reported to FIU-IND) shall be preserved for five years from the date of the transaction;
• Records pertaining to client identification and CDD (officially valid documents, client files, correspondence) shall be preserved for five years after the client relationship has ended, whichever is later;
• Records shall be maintained in both hard and soft copy in a manner allowing easy and quick retrieval by competent authorities; and
• Confidentiality of records shall be maintained; where an STR has been or is to be filed, the client shall not be informed of the report or suspicion (‘no tipping off’).

(The retention period prescribed under the PMLA and PML Rules is currently five years; this Policy adopts that statutory period.)

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

• Gives rise to reasonable grounds of suspicion that it may involve proceeds of crime, irrespective of value;
• 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 reasonable grounds of suspicion that it may involve financing of terrorism.

19.1 Indicators of suspicious transactions

• Clients whose identity verification is difficult, or who are non-cooperative in providing information;
• Clients from, or introduced by persons/entities in, high-risk countries;
• Fee payments or engagement inconsistent with the client’s apparent financial standing;
• Unusual payment instructions, or payments from unrelated third parties;
• Unusual transactions with no apparent economic purpose; and
• Unusual engagement by clients of special categories or clients from high-risk jurisdictions.

The IA (as Principal Officer) shall record, in writing, the reasons for treating any transaction as suspicious, without undue delay in arriving at such a conclusion.

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

An updated list of individuals and entities subject to sanctions (asset freezing, denial of financial services) approved under various United Nations Security Council Resolutions (UNSCRs) is available on the UN website. The IA shall ensure no client relationship is established in the name of any person on such list, and shall continuously screen existing client relationships against the list. Details of any client bearing resemblance to a listed individual/entity shall immediately be intimated to SEBI and FIU-IND.

Section 51A of the Unlawful Activities (Prevention) Act, 1967 (“UAPA”), relating to prevention of money laundering and financing of terrorism, was inserted by the UAPA (Amendment) Act, 2008. The Central Government’s Order dated 2nd February, 2021 (superseding the earlier Order dated 27th August, 2009), read with SEBI circular No. SEBI/HO/MIRSD/DOP/CIR/P/2021/36 dated 25th March, 2021, sets out the procedure for implementation. Under these provisions, the Central Government may freeze, seize or attach funds/assets held by, or at the direction of, listed individuals or entities, and prohibit any person from making funds or services available to them. The IA shall ensure effective and expeditious implementation of the procedure laid down in the UAPA Order.

In terms of the PML Rules, the IA is required to report information relating to cash and suspicious transactions to:

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

The IA shall follow the reporting requirements and formats available on the FIU-IND website under “Obligation of Reporting Entity – Furnishing Information – Reporting Format,” and shall file reports electronically through the FINnet/FINGate portal.

• Cash Transaction Report (CTR), wherever applicable, shall be submitted for each month by the 15th of the succeeding month;
• Suspicious Transaction Report (STR) shall be submitted within 7 working days of arriving at a conclusion that a transaction (cash or non-cash), or a series of connected transactions, is suspicious;
• Non-Profit Organisation Transaction Report (NTR), where applicable, shall be submitted by the 15th of the succeeding month;
• The IA (as Principal Officer) is responsible for timely submission of the CTR, STR and NTR to FIU-IND, with utmost confidentiality;
• No ‘nil’ reporting is required where there are no cash/suspicious/NPO transactions to report; and
• No restriction shall be placed on a client relationship merely because an STR has been filed. The IA shall not disclose (‘tip off’) that an STR is being or has been filed, and shall file an STR wherever there are reasonable grounds to believe a transaction involves proceeds of crime, irrespective of amount or any threshold applicable to predicate offences under the PMLA Schedule.

To ensure proper discharge of statutory obligations under the PMLA, ROHIT GUPTA is designated as the sole Principal Officer, and his name, designation, address and email have been/shall be intimated to the Director, FIU-IND. As the IA acts in an individual capacity, he is the single point of contact for all AML/PMLA matters at every place of business and for every purpose connected with his Advisory practice; no separate Designated Director, compliance committee, or Board is applicable, and no board resolution is required for the designation, adoption or amendment of this Policy.

26.1 Personal and Associate Training

ROHIT GUPTA shall keep himself, and any associate or person associated with his Advisory services (if engaged in future), adequately trained and updated on AML, CFT and related procedures, including relevant case studies, so as to remain sensitive to the risk of his practice being misused for money laundering or terrorist financing.

26.2 Investor Education

As AML measures require the IA to seek certain personal information from clients, the IA shall sensitise clients to the fact that such requirements emanate from the AML/CFT framework, and shall, where appropriate, display relevant literature/information on his website (if any) to educate clients on the objectives of the AML programme.

• This Policy, and the rationale behind it, shall be fully understood and consistently implemented by the IA and any associate engaged by him;
• This Policy shall be reviewed at least annually to ensure its continued effectiveness;
• Client acceptance policies and CDD measures sensitive to money-laundering risk shall be applied depending on client type, engagement and transaction;
• A system shall be maintained for identifying, monitoring and reporting suspected money laundering or terrorist financing to the relevant authorities;
• Enhanced Due Diligence (EDD) shall be applied to high-risk clients, including PEPs and clients from high-risk jurisdictions; and
• All KYC and engagement data shall be stored securely, with access restricted to the IA (and any authorised associate), and protected in compliance with applicable data-protection and privacy laws.

As Rohit Gupta Proprietor Algolytical operates as an Individual Investment Adviser with no Board of Directors or corporate management structure, this Policy is adopted by his personal signature below, without requirement of any board resolution or similar corporate authorisation. This Policy is effective from the date mentioned herein and shall be reviewed at least annually and updated as and when required to reflect changes in applicable law and regulation.

Rohit Gupta Proprietor Algolytical
(Sole Proprietor through Rohit Gupta)
Individual Investment Adviser – Principal Officer & Point of Contact for (PMLA/AML-CFT)
SEBI Reg. No. INA000020138
BSE (IAASB) Enlistment No. 2260

Date: 10th July, 2026
Place: Shalimar Bagh, Delhi