ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM
It is the policy of the firm to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities.
Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler’s checks, or deposited into accounts at financial institutions. At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.
Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal the origin or intended use of the funds, which will later be used for criminal purposes.
AML COMPLIANCE OFFICER DESIGNATION AND DUTIES
The firm has designated an Anti-Money Laundering Program Compliance Officer (“AMLCO”), with full responsibility for the firm’s AML program.
AMLCO is qualified by experience, knowledge and training. The duties of the AMLCO will include monitoring the firm’s compliance with AML obligations, overseeing communication and training for employees. The AMLCO will also ensure that proper AML records are kept. When warranted, the AMLCO will ensure Suspicious Activity Reports (SAR) are filed.
The firm will provide any/all government/regulatory agencies with contact information for the AML Compliance Officer (if, where and when required), including name, title, mailing address, e mail address, telephone number and facsimile number. The firm will promptly notify relevant agencies/authorities of any change to this information
GIVING AML INFORMATION TO LAW ENFORCEMENT AND FINANCIAL INSTITUTIONS
Under current and future global regulations, as updated/enacted/enforced from time to time, we will respond to a Financial Crimes Information request about accounts or transactions by immediately searching our records, to determine whether we maintain or have maintained any account for, or have engaged in any transaction with, each individual, entity, or organization named in the request. Upon receiving an information request, we will designate one person to be the point of contact regarding the request and to receive similar requests in the future.
Unless otherwise stated in the request, we are required to search current accounts, accounts maintained by a named suspect during the preceding 12 months, and transactions conducted by or on behalf of or with a named subject during the preceding six months. If we find a match, we will report it to party that has made the information request and to any/all government/regulatory agencies/institutions (as required). If the search parameters differ from those mentioned above (for example, if party making the request, requests longer periods of time or limits the search to a geographic location), we will limit our search accordingly.
If we search our records and do not uncover a matching account or transaction, then we will reply to the request by indicating the same.
We will not publicly disclose the fact that a government/regulatory institution or any other authorized party such as an authorized broker dealer/securities exchange/similar mercantile facility has requested or obtained information from us. We will maintain procedures to protect the security and confidentiality of requests from any authorized party requesting information. However, we shall not provide any information that is not required over and above the information required, in order to comply with the information request. In order to protect the rights of privacy and confidentiality of every client of Capital Street, we shall ensure we comply with all requests for information that pertain to any laws and regulations applicable, while protecting the rights of customers, by limiting the disclosed information, to the information requested, thereby ensuring that we do not violate any/all legal provisions that protect the rights of a client to keep their private information confidential.
We will direct any questions we have about the request to the requesting party, and/or to the designated government/law enforcement agency designated to oversee/coordinate such requests (where required).
Unless otherwise stated in the information request, we will not be required to treat the information request as continuing in nature, and we will not be required to treat the request as a list for purposes of the customer identification and verification requirements. We will not use information provided to requesting parties/agencies/institutions for any purpose other than (1) to report to the mandated authorities/parties/institutions as required applicable legal provisions; (2) to determine whether to establish or maintain an account, or to engage in a transaction; or (3) to assist the firm in complying with any requirement of Legal Provisions governing Money Laundering.
Sharing Information with Other Financial Institutions
Capital Street will share information about those suspected of terrorist financing and money laundering with other financial institutions for the purposes of identifying and reporting activities that may involve terrorist acts or money laundering activities and to determine whether to establish or maintain an account or engage in a transaction. However, before we share information with another financial institution, we will take reasonable steps to verify that the other financial institution has conducted its own internal due diligence/obtained permissions from relevant government/regulatory agencies/institutions/agencies prior to requesting information, either by obtaining confirmation/supporting documentation from the financial institution or by consulting/seeking advice from the appropriate government agency responsible for coordinating/overseeing such information requests. We understand that this requirement applies even with respect to financial institutions with whom we are afiliated, and so we will obtain the requisite documentation from affiliates and follow all required procedures.
We will employ strict procedures both to ensure that only relevant information is shared and to protect the security and confidentiality of this information, including segregating it from the firm’s other books and records.
In addition to sharing information with other financial institutions about possible terrorist financing and money laundering, we will also share information about particular suspicious transactions with our clearing broker for purposes of determining whether one of us will file a SAR. In cases in which we file a SAR for a transaction that has been handled both by us and by the clearing broker, we may share with the clearing broker a copy of the filed SAR unless it would be inappropriate to do so under the circumstances, such as where we filed a SAR concerning the clearing broker or one of its employees.