9PROXY AML Compliance Program Policy
Effective Date: 15th November 2023
1. FIRM POLICY
9Proxy is committed to upholding the highest standards of anti-money laundering (AML) compliance and preventing any activities that could facilitate money laundering or the funding of terrorist or criminal activities. We strictly adhere to all applicable requirements under the Bank Secrecy Act (BSA) and its implementing regulations.
Our AML policies, procedures, and internal controls are meticulously designed to ensure full compliance with all relevant BSA regulations and FINRA rules. These policies will be subject to regular review and updates to remain current and effective, adapting to changes in regulations and our evolving business landscape.
2. Providing AML Information to Federal Law Enforcement Agencies and Other Financial Institutions
9Proxy acknowledges the importance of maintaining the confidentiality of information shared with FinCEN and other federal law enforcement agencies. We commit to disclosing such information only to the extent necessary to fulfill information requests while respecting the privacy and confidentiality of our clients.
2.1. National Security Letters
We understand that receiving a National Security Letter (NSL) is a matter of utmost confidentiality. None of our managers, employees, or proxies are authorized to directly or indirectly disclose to any party that the FBI or any other federal government authority has requested or obtained access to our records. To safeguard the confidentiality of any NSL received, we will process and maintain the NSL through [9Proxy]. In the event that we file a Suspicious Activity Report (SAR) after receiving an NSL, the SAR will not contain any reference to the NSL itself but will solely focus on providing detailed information about the suspicious activity detected.
2.2. Monitoring Accounts for Suspicious Activity
9Proxy is committed to monitoring account activity to detect any unusual size, volume, pattern, or type of transactions, taking into account appropriate risk factors and red flags relevant to our business.
Red flag:
- Unusual or Suspicious Identification Documents: Customers providing identification documents that are difficult to verify or are inconsistent with other information provided.
- Reluctance to Provide Customer Due Diligence Information: Customers who hesitate or refuse to provide complete customer due diligence information as required. This includes details about the nature and purpose of their business, prior financial relationships, anticipated account activity, business location, and, when applicable, information about the entity's officers and directors.
- Failure to Identify a Legitimate Source of Funds: Customers who cannot identify a legitimate source of funds or provide false, misleading, or substantially incorrect information regarding the origin of their funds.
- Transactions in High-Risk Jurisdictions: Customers domiciled in, doing business in, or regularly transacting in jurisdictions known for bank secrecy, tax sheltering, narcotics production, ineffective AML/Combating the Financing of Terrorism systems, or conflict zones.
- Lack of Business Knowledge: Customers who have difficulty describing the nature of their business or exhibit a lack of general knowledge about their industry.
- Unexplained Use of Services: Customers with no apparent reason for using our services or selecting our location.
- Previous Rejections or Terminations: Customers who have been previously rejected or had their relationships terminated by other financial services firms.
- Multiple Addresses Associated with Accounts: Customer legal or mailing addresses associated with multiple unrelated accounts or businesses.
- Proxy Usage for Undisclosed Principals: Customers appearing to act as proxies for undisclosed principals but reluctant to provide information about the actual beneficiaries.
- Unwillingness to Provide Beneficiary Information: Trusts, shell companies, or private investment companies unwilling to provide information on controlling parties and underlying beneficiaries.
- Involvement in Legal Proceedings: Customers with known criminal, civil, or regulatory proceedings related to crime, corruption, misuse of public funds, or associations with individuals with such backgrounds.
- Questionable Backgrounds: Customers with questionable backgrounds or backgrounds differing from expectations based on their stated business activities.
- Multiple Accounts with No Apparent Purpose: Customers maintaining multiple accounts, accounts in the names of family members, or corporate entities with no apparent business or other legitimate purpose.
Other Potential Red Flags:
In addition to the above, we remain vigilant for other potential red flags, including:
- Reluctance to Provide Transaction Information: Customers reluctant to provide information necessary for transaction reporting.
- Concerns about Compliance: Unusual concern expressed by customers regarding the firm's compliance with government reporting requirements and AML policies.
- Attempts to Discourage Reporting: Efforts to persuade employees not to file required reports or maintain necessary records.
- Notifications of Suspicious Activity: Receipt of notifications from the clearing firm regarding potentially suspicious activity in customer accounts.
- High-Value Transactions Inconsistencies: High-value transactions that are inconsistent with the customer's known income or financial resources.
- Lack of Clear Business Purpose: Transactions lacking a clear business sense or apparent investment strategy.
- Inadequate Financial Resources: Customer business, occupation, or financial resources not commensurate with the scale and nature of their activities.
- Transactions on Behalf of Third Parties: Transactions indicating acting on behalf of third parties with no apparent lawful purpose.
- Sudden Transaction Pattern Changes: Unexplained sudden changes in transaction patterns.
- Securities Transactions Unwound Prematurely: Securities transactions that are unwound before maturity without logical reasons.
- Neglect of Transaction Costs or Fees: Disregard for transaction costs or fees.
In addition to these red flags, we maintain a high level of diligence in monitoring the use of trust funds in business transactions and other financial activities to ensure the integrity of our services.
AML Recordkeeping
The responsibility for maintaining required AML records and filing Suspicious Activity Reports (SARs) lies with our designated AML Compliance Person and their designated team members. They will ensure that AML records are accurately and securely maintained, and SARs are promptly filed when required.
Clearing/Introducing Firm Relationships
9Proxy maintains a close working relationship with our clearing firm to actively detect and prevent money laundering. We exchange information, records, data, and exception reports as needed to comply with AML laws. We will make use of exception reports provided by our clearing firm to monitor customer activity and provide necessary customer identification and due diligence information to effectively monitor transactions. Our mutual understanding of how we share information and responsibilities is documented in a written agreement.
Senior Manager Approval
Senior management at 9Proxy has officially approved this AML compliance program in writing, affirming its appropriateness in achieving and maintaining our firm's ongoing compliance with the BSA and its implementing regulations.
At 9Proxy, we are committed to upholding the highest standards of AML compliance and actively preventing any activities that could compromise the integrity of our financial system.