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1. This Guidelines are stipulated in accordance with Article 6 of Anti-Money Laundering Act, Article 22-1 of Regulations Governing Securities Investment Trust Enterprises, Article 6 of Regulations Governing Offshore Funds and Article 22-1 of Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises for the purpose of preventing money laundering. |
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Things to know about money-laundering prevention process:
1) Things to know about subscribing Securities Investment Trust Funds, Offshore Funds (collectively the “fund”) or processing discretionary investment business:
a) Customers are to have the following documents submitted for review and approval while the employees of the company are having the subscription of fund or processing discretionary investment business for the first time:
A. Customers of natural person who are locals, should have their I.D. Card presented. Except for those under the age of 14 without national I.D. Card, Household Registration shall be the substitute. The national I.D. Card should be required to be in place. Foreigners should have their passport presented. If customers are a minor or an individual who has been declared by law to be prohibited from owning property, the I.D. Card or passport of the representative by law should be provided in place.
B. Customers of legal person or institute, the authorizee should provide customer’s Power of Attorney, authorizee’s identity document, representative’s identity document, customer’s registration certificate, archive or relevant supporting document. Proof of tax returns may not be the only evidence presented for the purpose of account-opening.
C. Identity documents examined should keep photocopy for record. The customer’s Power of Attorney should keep original document for record.
b) The employees of the company who are having the aforementioned (a) businesses processed should have dual identity documents examined and kept copies except for the original Power of Attorney on file for record if customers have remitted cash in person over the counter to apply for acquisition or order, and request customers to provide the following documents for cross reference:
A. Except that customers of natural person who are locals should have their I.D. Card （For those under the age of 14 without I.D. Card, Household Registration shall be the substitute.）produced, other identity document should also be presented such as health insurance card, passport, driver’s license, student I.D., household registration, or household book while foreigners are to have their passport produced and other identity document presented including legal residence card or others. If customers are a minor or an individual who has been deprived from owning property, the original I.D. Card or passport of the representative by law is demanded including other identity document.
B. Customers of legal person or institute, the authorizee is to provide customer’s Power of Attorney, authorizee’s identity document, representative’s identity document, customer’s registration certificate, archive or relevant supporting document including the minutes of Board meeting, Articles of Association, and financial statements for acquisition and order. Tax return may not be the one and only evidence presented for having an account opened.
C. The secondary identity certificate other than the aforementioned I.D. Card, passport, and document of registration certificate must be sufficient for identification. If the log of institute, school, and group help identify the identity of customer, it can be classified as the secondary identity document. If customers refuse to produce the said document, the application or order should be declined or it will not be processed until and after the confirmation of customer’s identity.
c) The employees of the company that are having the identity document of customer or authorizee examined should be aware of the use of fake name, assumed identity, forged business entity or forged legal person group by the costumer or the authorizee for acquisition or order; or, the presentation of forged and modified identity document; or, the submission of questionable and ambiguous document and data and without other supporting data provided or the provided supporting data cannot be verified; or, the delay of customer in producing necessary identity certificate without proper cause; or, nonconformity identified upon the acceptance of acquisition or order, or, the inadequacy of customer in offering reasonable explanations for other nonconformity found, the acquisition or order should be declined.
d) For the fund subscriptions through consignment and authorization, the employees of the company should examine the consignment or authorization document that is required by law, the identity of customer and customer’s representative; investigate and verify the authentication and identity document of the consignment and authorization; the identity data of customer and customer’s representative should be filed for record; also, confirm the aforementioned information with customer by phone, in writing, or through other means. If the data verification is found difficult and thus cannot be completed, the fund subscriptions should be declined.
e) For discretionary investment, try to understand customer’s financial status in accordance with the data provided in customer’s profile; moreover, demand customer to provide supporting document or to perform investigation on site. If the discretionary investment is discrepant from the customer’s social status or income, or, if the source of fund cannot be identified, special attentions should be paid for the suspicious activities of money laundering.
f) If one single fund subscription is for an amount over NT$1,000,000 (or an equivalent amount in foreign currency) and it is paid with cash or a doubt over suspicious activities of money laundering is warranted, the identity of customer should be identified and with the said documents in (a) presented; moreover, the information of investor’s name, birthday, address, phone number, transaction account number, trade amount, and identity document should be documented. For the acquisition completed by inventor’s representative, the representative’s name, birthday, phone number, and identity document documented and with the confirmed records and transaction evidence reserved for record.
g) If there is an unusual large subscription amount that is discrepant from customer’s status or income, special attentions should be paid for the suspicious activities of money laundering.
h) If the fund applicant or beneficiary is found to be on the terrorist list or group identified by foreign government to Financial Supervisory Commission, Executive Yuan (referred to as “FSC” hereinafter) or it is suspected or has reasonable reason to suspect of the trading amount associated with terrorism activities, terrorist organizations or financings the transaction should be classified as suspicious money laundering and report to Ministry of Justice’s Investigation Bureau with FSC also informed immediately.
i) If the customer is in connection with special serious incidents reported on television, newspaper, magazine or internet, the customer’s fund subscription or discretionary investment should be noted whether the transaction is suspicious of money laundering.
j) Things to know about other filings for fund subscriptions and processing discretionary investment applications should be processed subject to internal operation requirements.
2) Things to know about fund transaction:
a) When a customer subscribes to a single fund for more than NTD$1,000,000 (or an equivalent amount in foreign currency) and pays with cash, or the customer has engaged in suspicious activities, the company should verify the customer’s identity and reserve the records of verification and transaction.[The method of verification is same to which stated in 2-(1)-(e)]
b) The company should pay careful attention for the customer who makes cash transaction using any of the following:
A. When a customer subscribes to or redeems a certain fund in the same business day for more than NTD$1,000,000 (or an equivalent amount in foreign currency) that is discrepant from investor’s income and condition.
B. When a customer subscribes to or redeems a single fund or different funds in the same institute for more than NTD$1,000,000 respectively (or an equivalent amount in foreign currency) that is discrepant from investor’s income and condition.
C. When a customer makes subscription and redemption for equivalent amount and in equivalent time.
D. When a customer subscribes funds with money remitted from certain areas (uncooperative nations) and redeems within 5 business days after subscription, or the customer requests to transfer proceeds directly from Taiwan, and the transactions are discrepant from investor’s income and condition. The company shall download and update the nations or economy bodies mentioned in this clause from the website of “Financial Action Task Force on Money Laundering (FATF)” (www.fatf-gafi.org) If the company updates the list of uncooperative nations or terrorist group, it is not required to report to SFC.
E. When the transactions are made by a customer on behalf of his client or by different third parties on behalves of the customer.
F. Other conspicuous irregular transactions.
c) Be aware of and examine customer’s transaction report periodically and with a business model established for each customer to investigate nonconformity or specious money laundering.
3) Things to know about signing discretionary investment agreement:
a) Re-confirm the identity of customer [to be verified the same way as the method stated in II 1] (5)] and with customer’s application form and profile filed for record.
b) If any of the following items occurs after the discretionary investment agreement is signed, the discretionary depository institute should be informed of any suspicious cash transactions which might be related to money laundering in the investment accounts.
A. The said customer is not identified.
B. Customer denies there is any discretionary investment agreement signed.
C. The mailed report or document is returned by postal office for “the identity of receiver is unknown.”
D. Customer’s account is proven to be abused by others with the support of sufficient evidence or fact.
E. The content of application form is forged or false.
F. If customer terminates the discretionary contract immediately after signing it with no proper cause.
G. If customer increases investment in large amount or with intensive frequency during throughout the discretionary agreement period, but the fund is discrepant from the customer’s income and condition.
H. Customer decreases investment fund without proper causes throughout the discretionary investment agreement period.
I. Customer unusually increases or decreases investment fund intensively throughout the agreement period.
c) Keep a close and frequent contact with customers throughout the discretionary investment agreement period; also, be aware of and controls customer’s financial status and with at least one interview arranged annually to update or supplement customer’s profile for reference in investigating suspicious money-laundering activities.Things to know about money-laundering prevention process:
1) Things to know about subscribing Securities Investment Trust Funds, Offshore Funds (collectively the “fund”) or processing discretionary investment business:
a) Customers are to have the following documents submitted for review and approval while the employees of the company are having the subscription of fund or processing discretionary investment business for the first time:
A. Customers of natural person who are locals, should have their I.D. Card presented. Except for those under the age of 14 without national I.D. Card, Household Registration shall be the substitute. The national I.D. Card should be required to be in place. Foreigners should have their passport presented. If customers are a minor or an individual who has been declared by law to be prohibited from owning property, the I.D. Card or passport of the representative by law should be provided in place.
B. Customers of legal person or institute, the authorizee should provide customer’s Power of Attorney, authorizee’s identity document, representative’s identity document, customer’s registration certificate, archive or relevant supporting document. Proof of tax returns may not be the only evidence presented for the purpose of account-opening.
C. Identity documents examined should keep photocopy for record. The customer’s Power of Attorney should keep original document for record.
b) The employees of the company who are having the aforementioned (a) businesses processed should have dual identity documents examined and kept copies except for the original Power of Attorney on file for record if customers have remitted cash in person over the counter to apply for acquisition or order, and request customers to provide the following documents for cross reference:
A. Except that customers of natural person who are locals should have their I.D. Card （For those under the age of 14 without I.D. Card, Household Registration shall be the substitute.）produced, other identity document should also be presented such as health insurance card, passport, driver’s license, student I.D., household registration, or household book while foreigners are to have their passport produced and other identity document presented including legal residence card or others. If customers are a minor or an individual who has been deprived from owning property, the original I.D. Card or passport of the representative by law is demanded including other identity document.
B. Customers of legal person or institute, the authorizee is to provide customer’s Power of Attorney, authorizee’s identity document, representative’s identity document, customer’s registration certificate, archive or relevant supporting document including the minutes of Board meeting, Articles of Association, and financial statements for acquisition and order. Tax return may not be the one and only evidence presented for having an account opened.
C. The secondary identity certificate other than the aforementioned I.D. Card, passport, and document of registration certificate must be sufficient for identification. If the log of institute, school, and group help identify the identity of customer, it can be classified as the secondary identity document. If customers refuse to produce the said document, the application or order should be declined or it will not be processed until and after the confirmation of customer’s identity.
c) The employees of the company that are having the identity document of customer or authorizee examined should be aware of the use of fake name, assumed identity, forged business entity or forged legal person group by the costumer or the authorizee for acquisition or order; or, the presentation of forged and modified identity document; or, the submission of questionable and ambiguous document and data and without other supporting data provided or the provided supporting data cannot be verified; or, the delay of customer in producing necessary identity certificate without proper cause; or, nonconformity identified upon the acceptance |
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Internal control procedure of anti-money laundering:
1) Company should reserve the complete and correct transaction record of subscription and redemption in terms of the fund of a certain amount or engaged in suspicious money laundering activities. Or, company should reserve the complete transaction proofs, customer ID confirmation and filing record for discretionary investment. Company should comply with the “Guidelines for Anti-Money Laundering” and its related regulations.
2) The reservation method and period of transaction records:
a) For the discretionary investment business or one single cash transaction for over NT$1,000,000 (or an equivalent amount in foreign currency), company should reserve the transaction records, confirmation, and filing report that are sufficient to understand the transaction for at least five years.
b) For the transaction engaged in suspicious money-laundering activities, company should reserve the transaction records, confirmation, and filing report that are sufficient to understand the transaction for at least five years.
c) For customer who has redeems his entire fund or terminates discretionary business agreement, company should reserve the customer’s related information for at least five years, such as ID proof, account information, and communication information.
d) For the cases under investigation by law, all the expired confirmation and transaction records should be reserved till the case closed.
e) Company should pay special attention to the transaction with no obvious economic purpose, legitimate complicate transaction for large amount, and all the abnormal transaction. Company should examine the background and purpose of the above-mentioned transaction and file all the findings for at least five years.
3) The confirmation of customer’s identity should be processed subject to the followings:
a) At the time of establishing a business relationship with customers or when there is insufficient information for the confirmation of customer’s identity, it should be identified and documented subject to the document or other identity paper issued by government.
b) The identity of customers should be confirmed forcefully for the order account, proxy transaction, and individual or group that represents a high risk to the goodwill of securities investment trust and consulting business.
c) For the identity of customers that are not conducting business with the company face-to-face, it is to be confirmed effectively to reduce risk.
d) Provided that it is not in violation against relevant regulations, if customer’s source of fund is known for fact or is assumed to be from corruption or embezzlement, the acquisition or order will not be processed.
4) The internal filing procedure and the procedure of filing to designated institute:
a) The Headquarters should have the Vice President (and/or higher level officers ) and/or equivalent officers designated to help coordinate and supervise the execution of money-laundering control; the designated personnel must have been trained with money-laundering control courses. The designated personnel should attend the said training courses within six months since the day reporting to duty. A responsible supervisor will be assigned to the position under the designated personnel in the Headquarters and it is a position to be assumed by senior personnel. Branch office should have senior supervisor appointed to be the designated supervisor for money-laundering supervision and control.
b) The employees of the company should have the fund subscription from customers rejected upon the occurrence of the followings and with the designated supervisor advised:
A. Customers who have been informed and requested having identity document presented for the process of cash transaction refuse to have the said document submitted accordingly.
B. Coerce or intend to coerce the employees of the company not to have the confirmed records, transaction evidences, or reports filed for record.
C. Try to persuade the employees of the company avoiding the data that are required for the process of transaction.
D. Seek for the possibility of avoiding report filing.
E. Try to clarify the source of fund or deny the violation of money-laundering.
F. Insist to have transactions completed immediately without giving proper causes for doing so.
G. Intend to offer profit to the employees of the company for the return of services from securities financial institute.
c) Filing procedures:
A. For one single cash transaction for more than NTD$1,000,000 (or an equivalent amount in foreign currency), the company in-charge person should fill in attachment A and file to the Ministry of Justice’s Investigation Bureau through the Headquarters within five business days upon the occurrence of the transaction.
B. Reporting suspicious money-laundering
(i) The clerk of the company who is aware of any nonconforming transaction or has a doubt over suspicious activities of money laundering should have it reported to the designated supervisor immediately.
(ii) The said designated supervisor should determine to have the said findings of the clerk filed for report or not upon receiving an advice. If a decision is made to have the said nonconforming transaction or money-laundering reported, the responsible clerk should be instructed to have a report file (Attachment 2).
(iii) The responsible clerk is to have the report forwarded to the responsible personnel in the Headquarters after having it reviewed by the designated supervisor. The responsible personnel in the Headquarters are to have the report filed with the Ministry of Justice’s Investigation Bureau for record.
(iv) The process of having a report filed with the Ministry of Justice’s Investigation Bureau is to be completed within ten business days upon the awareness of suspicious money laundering.
(v) If the designated supervisor has concluded the nonconforming transaction or suspicious money-laundering activities are deemed as , a verbal report should be made to the responsible personnel in the Headquarters first and with the Ministry of Justice’s Investigation Bureau informed through fax or other means and then with a written report filed afterwards.
5) Confidentiality:
a) The employees of the company are obliged to have the aforementioned data and information kept in confidence without revealing to any third party.
b) The data and document filed should be kept in confidence and an unauthorized information reveal should be processed subject to relevant regulations.
6) Evaluate the adequacy of internal control measures in preventing money-laundering periodically:
a) The Headquarters of the company should have the Money-Laundering Control Act reviewed periodically and with records documented.
b) For the widespread branch offices, the responsible personnel should be summoned to have a regional money-laundering control review meeting held for brainstorming.
7) Audit performed by internal auditor to prevent money-laundering:
a) Company should have money-laundering noticeable items been contained in internal control system, which should be reported to industrial association to review according to related regulations. Meanwhile, auditing office should execute periodical audits.
b) Auditors that have identified any nonconformity committed by the employees of the company who are responsible for money-laundering control process should have an audit report prepared and submitted to the responsible personnel and President for approval; moreover, a corrective action should be proposed for the reference of employee’s on-job training.
c) The responsible department in the Headquarters should have the auditors who have major nonconformity identified but failed to have it disclosed intentionally disciplined.
8) Securities investment trust business or securities investment consulting business should apply relevant money-laundering control act to the additional business of theirs.
9) The company shall ensure that its overseas branches and subsidiaries, to the extent that the law of the host country permits, comply with AML/CFT measures that are as conscientious as this Guidelines are. Where the requirements in the host country differ from those in the home country, the company shall require that the overseas branch or subsidiary apply the higher of the two standards. However, when the identity of higher standard is in doubt, the home country’s definition should be adopted. Where the law of the host country conflicts with home country’s law such that the overseas branch or subsidiary is unable to observe the same standard with the head office, the company shall report the relevant facts to the competent authority for record.Internal control procedure of anti-money laundering:
1) Company should reserve the complete and correct transaction record of subscription and redemption in terms of the fund of a certain amount or engaged in suspicious money laundering activities. Or, company should reserve the complete transaction proofs, customer ID confirmation and filing record for discretionary investment. Company should comply with the “Guidelines for Anti-Money Laundering” and its related regulations.
2) The reservation method and period of transaction records:
a) For the discretionary investment business or one single cash transaction for over NT$1,000,000 (or an equivalent amount in foreign currency), company should reserve the transaction records, confirmation, and filing report that are sufficient to understand the transaction for at least five years.
b) For the transaction engaged in suspicious money-laundering activities, company should reserve the transaction records, confirmation, and filing report that are sufficient to understand the transaction for at least five years.
c) For customer who has redeems his entire fund or terminates discretionary business agreement, company should reserve the customer’s related information for at least five years, such as ID proof, account information, and communication information.
d) For the cases under investigation by law, all the expired confirmation and transaction records should be reserved till the case closed.
e) Company should pay special attention to the transaction with no obvious economic purpose, legitimate complicate transaction for large amount, and all the abnormal transaction. Company should examine the background and purpose of the above-mentioned transaction and file all the findings for at least five years.
3) The confirmation of customer’s identity should be processed subject to the followings:
a) At the time of establishing a business relationship with customers or when there is insufficient information for the confirmation of customer’s identity, it should be identified and documented subject to the document or other identity paper issued by government.
b) The identity of customers should be confirmed forcefully for the order account, proxy transaction, and individual or group that represents a high risk to the goodwill of securities investment trust and consulting business.
c) For the identity of customers that are not conducting business with the company face-to-face, it is to be confirmed effectively to reduce risk.
d) Provided that it is not in violation against relevant regulations, if customer’s source of fund is known for fact or is assumed to be from corruption or embezzlement, the acquisition or order will not be processed.
4) The internal filing procedure and the procedure of filing to designated institute:
a) The Headquarters should have the Vice President (and/or higher level officers ) and/or equivalent officers designated to help coordinate and supervise the execution of money-laundering control; the designated personnel must have been trained with money-laundering control courses. The designated personnel should attend the said training courses within six months since the day reporting to duty. A responsible supervisor will be assigned to the position under the designated personnel in the Headquarters and it is a position to be assumed by senior personnel. Branch office should have senior supervisor appointed to be the designated supervisor for money-laundering supervision and control.
b) The employees of the company should have the fund subscription from customers rejected upon the occurrence of the followings and with the designated supervisor advised:
A. Customers who have been informed and requested having identity document presented for the process of cash transaction refuse to have the said document submitted accordingly.
B. Coerce or intend to coerce the employees of the company not to have the confirmed records, transaction evidences, or reports filed for record.
C. Try to persuade the employees of the company avoiding the data that are |
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Arrange or join money-laundering control training courses periodically:
1) Pre-job training:
Arrange new recruits to attend money-laundering control training courses for at least three hours in order to help them understand relevant regulations and responsibilities.
2) On-the-job training:
a) Regulations propaganda:
Introduce the update of Money-Laundering Control Act after its enforcement, the Money-Laundering Control Act and relevant regulations, and the responsive control measures of the company to employees promptly.
b) General education:
A. Provide or arrange training courses and seminars periodically to employees for reinforcing their judgment, substantiating money-laundering control function, and avoiding violations committed by employees.
B. Introduce case study periodically to help employees understand the features of money-laundering and suspicious money-laundering in order to help identify money-laundering transactions. |
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