Surveillance Policy Of Depository Participant

TRUSTED SHARES & INVESTMENTS LTD-DPID – CDSL- 12057900   INTRODUCTION National    Securities    Depository    Limited    National    (NSDL)    and    Central    Depository    Services Limited (CDSL)         Circular       No.:        NSDL/POLICY/2021/0072        Date:         July        15,        2021&CDSL/OPS/DP/SYSTM/2021/309 July 15, 2021 has directed the Depository Participants to frame  a surveillance   policy   for  effective   monitoring   of   the   alerts   based   on   effective   monitoring      the transactions   as per the laid down surveillance policy.  Depository Participants have been directed to keep proper mechanisms and to ensure that proper checks and balances are in control regarding their surveillance obligations and TRUSTED SHARES AND INVESTMENTS LIMITED is framing this policy accordingly. Applicability The  policy is applicable to the  DP  Operations of Trusted Shares & Investments Ltd w.e.f. 01-10-2021  The   policy/framework  is  approved  in  the   meeting of  Board  of  Directors  of Trusted Shares & Investments Ltd held  on 09^th Sept2021which shall cover the following: 1 Obligation of Depository Participants to generate Surveillance Alerts: CDSL  is  providing  dormant account and  transactional  alerts  on   daily  basis (if any)  based  on   threshold defined  by    CDSL  to   the   all   the   Depository  Participants  through CDSL  report  download  utility.  As   per    applicable  Communiqués  or circulars,  TRUSTED SHARES AND INVESTMENTS LIMITED  is   reviewing  these  alerts  and  taking  appropriate  actions  after carrying  out   due  diligence  viz.   Either disposing off   alerts with appropriate reasons/findings recorded or  filing suspicious Transaction Report (STR) with FIU-India in accordance with provisions of PMLA (Maintenance of records) Rules, 2005. Now with the   implementation of   this policy TRUSTED SHARES AND INVESTMENTS LIMITED will generate its   own alerts based on following parameters. 1-Multiple Demat Account with same PAN / Mobile Number / email-ID / Bank Account details / Address having off market transactions inter se. 2-Whether mails and couriers to parties are returned undelivered frequently? 3-   A   BO   who  has    submitted  modification  request  for   changes  in   his   /   her    /   its demographic details of address, email-id, mobile number, bank details, POA holder, Authorized Signatory etc.  Just after opening the account (within 30 days) 4-Frequent off-market transfer of securities, Trusted Shares & Investments Ltd will verify the genuine reasons. In case of off market transactions, purpose of transfer, details of consideration, if applicable, have to be obtained. Particular care has to be exercised for cash consideration and in cases where value of transaction is more  than  5  lakhs,  transactions  will  be  verified  by  the  Compliance  Manager/Senior  Executive  in addition to the  DP Manager. 5-Off-market transactions not commensurate with the income/net worth of the BO. 6-Pledge transactions not commensurate with the income/net worth of the BO. 7-High value off-market transfer immediately after modification of either email-ID/mobile number/address without genuine reason. 8-Review of reasons for off-market transfer provided by the  BO which appears non-genuine based one  it his/her profile of the  BO  or on  account of reason codes, including frequent off- market transfer with   reason code   gift/donation to  unrelated parties and/or with   reason code  off-market sales  and  off market transaction “ Returned of Loan”. 9-Suddenly increase in transaction activity in a newly opened account in a short span of time. An account in which securities balance suddenly reduces to zero and closed in a short span of time. Opened and an active account with regular transaction suddenly becomes dormant. 10-  The DP  shall identify suspicious/manipulative activities under taken by  any  client having  interest  with  the   Ex-Employee  of   the   Stock  Broker/Depository  Participant through monitoring of transaction(s). The DP shall review the alerts provided by CDSL on fortnightly basis and shall ensure to process and status thereof (Verified & Closed/Verified & Reported to Depository) as early as possible.  In   any   case,   these alerts will   be   processed within 30   days   from   the   date   of generation of the alert by CDSL. In case of any adverse finding matter be reported to Depository within 7 days. In case of any delayed in disposing off any alerts, reasons for the same shall be recorded. The DP   shall identify suspicious/manipulative activities under taken by   any   client through monitoring of transaction(s) The DP shall, in case of reporting of any transaction as STR to FIU-IND, shall evaluate whether any further action including.   2- Periodical Due Diligence 2.3.1     Balance sheets (in case of corporate accounts) are reviewed. It may be noted that all Corporate accounts having sufficient net worth. Accounts in DP are periodically reviewed to mark them active /inactive or dormant requiring different level of authorization. 2.3.2      When dealings were observed in select non group “A” shares only, necessary due diligence will be carried out. 2.3.3      Reporting within 7 days of identifying any adverse observation  

3. Obligation of Depository Participants to w.r.t. processing of Alerts:

The designated officials who are tasked to review the alerts on  daily  basis  shall  review the same. If the  designated official finds  after  review and  due  diligence that  the  alert  is required to be closed, the official shall  close  the same with  appropriate remarks. If  the  designated official after due diligence and making such inquiry as  such official finds necessary comes to  a conclusion that the  alert warrants an  action, the  official will forward the  same with  his/her views to the Compliance Officer for his/her approval. The Compliance Officer, after review of the alerts along with the  submitted comments of the  designated official, decides to  close the  alert, he/she shall close it  with appropriate remarks. If the  Compliance Officer finds that action in respect of such alert is warranted, he/she shall take such actions including filing STR with FIU-India, informing to Stock Exchanges and NSDL/CDSL and/or discontinue the  relationship with the  client. The  reports of such  instances along with  adverse observations and  details of  actions taken shall   be  submitted  to  the  CDSL  within  7  day   from   date   of  identification  of  such instances. The  records  of   alerts  generated,  disposed  of   as   closed  and  details  of   action  taken wherever applicable shall  be maintained with  such  security measures as would make such records temper proof and the  accesses available on  to designated officials under the supervision of the  Compliance Officer.  

4. Obligation of Compliance officer and Internal Auditor/Concurrent Auditor of the Depository Participants

The surveillance activities of the DP (Depository Participants) operations shall be conducted under overall supervision of the Compliance Officer of Trusted Shares & Investments Ltd. The policy implemented by  Trusted Shares & Investments Ltd in accordance with the  provisions of Prevention of Money Laundering Act, 2002 and rules made there under as Reporting Entity. A   quarterly  MIS  shall  be   put   up   by   the   Compliance  Officer  to   the   board  and  the Designated Director giving number of  alerts generated during the  quarter, number of alerts closed, number of  alerts on  which action taken with details of  action taken and number of alerts pending at the  end of the  quarter along with reasons for  pendency and action plan for  closure. The Board as  well as the  Designated Director shall be  apprised of any  exception noticed during the  disposal of the  alerts. The Designated Director shall be responsible for  all  surveillance activities carried out  by the  DP. Trusted Shares & Investments Ltd shall submit its  surveillance policy to  the  internal auditor of  DP  operations for review and shall satisfy the  queries/questions, if any, raised by  the  internal auditor with respect to  the  implementation of  the  surveillance policy, its  effectiveness and the  alerts generated.  

5. Obligation of Quarterly reporting of status of the alerts generated by Participants:

A quarterly statement providing duly  approved status of alerts in respect of DP  operations on  quarterly basis   shall   be  submitted to  CDSL in  the  prescribed format within 15 days  after  the end  of the quarter: In case Trusted Shares & Investments Ltd  DP  operation does  not  have  anything to report, a “NIL  Report” shall  be filed within 15 days  from  the end  of the quarter. Disassociating with the suspect client(s) and reporting to CDSL/SEBI and/or other Regulatory Authorities. The   DP    shall   maintain   records   for    such   period   as    is    prescribed   under   PMLA (Maintenance  of   Records)  Rules,  2005,  and  Securities  Contracts  (Regulation)  Rules, 1957, SEBI (Depository and Participants) Regulations, 1996, DP  Operating Instructions and any  other directions as  may be  issued by  NSDL/CDSL /SEBI/Stock Exchanges from time to time. The  DP shall  review the alerts provided by NSDL/CDSL on fortnightly basis  and  shall  ensure to  process the  same as  early  as possible. In  any  case,  these alerts will  be  processed within30 days  from  the date  of generation of the alert  by   CDSL. In case of any delayed in disposing off  any  alerts, reasons for  the  same shall be recorded.  The DP   shall  identify  suspicious/manipulative  activities  under  taken  by   any   client through monitoring of transaction(s)   6-Schedule of the implementation of the policy: The policy shall be implemented by DP operations with effect from   01.10.2021. The first reporting by DP operations shall be submitted within 15 days from  end  of 31.12.2021.   7-Review of Policy: The Surveillance Policy shall be reviewed on periodic basis and at least once in a year by the  Compliance Officer to  ensure that the  same is  updated in  line with market trends, updated regulations and practices.