Anti-money Laundering Policy

Policy Statement

The Anti-Money Laundering and Combating the Financing of Terrorism (“AML/CFT”) Policy Framework (“the Policy”) sets out the guidelines for Kuy Financials Limited (“Kudy” or “the Company”)’s compliance with the AML/CFT obligations under the law, as well as regulatory directives and aims to prevent any transaction that facilitates criminal activities actively.

This Policy defines the parameters which will assist Kudy to mitigate the adverse effects of criminal economic activities and promote integrity and stability in the financial markets. It outlines the guidelines and procedures concerning identifying and disclosing any real, potential, or perceived threat of Money Laundering and Terrorist Financing. It is also critical to preserving Kudy’s corporate integrity, reputation, and operational efficiency.

The Policy is intended to support, not replace, applicable laws governing AML/CFT, such as the Securities and Exchange Commission (“SEC”) Anti-Money Laundering/Combating Financing of Terrorism Regulation for Capital Market Operators, 2022, Money Laundering (Prevention and Prohibition) Act, 2022, Terrorism (Prevention and Prohibition) Act, 2022 and other relevant laws and regulations.

Policy Purpose and Objectives

The purpose of this Policy is to:

Ensure compliance risks (reputational, legal and economic) are easily identified, and adequately mitigated
Prevent the abuse of Kudy’s resources for Money Laundering (“ML”) and Terrorist Financing (“TF”)
Minimize the risks faced by Kudy from any relations or undertaking any transaction that may relate to or facilitate ML/TF or any other illicit activity.
Protect the integrity of the securities market against all forms of abuse, fraudulent and unfair trade practices
Provide guidance on the standards of conduct and practice that may be followed in the implementation of the Know your Customer (“KYC”) and Customer Due Diligence (“CDD”) requirements of the capital market
Protect the integrity of the capital market against all forms of abuse, fraudulent and unfair trade practices.

Scope and Applicability of the Policy

The Policy applies to Kudy, its Board of Directors, Management, Stakeholders and Staff concerning compliance with the rules and regulations that govern Kudy’s operations.

Definitions

Important definitions to bear in mind are set out as follows:

Compliance Officer: Is an individual who possesses relevant competence, authority and independence to implement Kudy’s AML/CFT compliance programme
Securities and Exchange Commission Money Laundering: The SEC was established by the provisions of the Investment and Securities Act, 2007 (“ISA”) Has been defined as the process whereby criminals attempt to conceal the illegal origin and/or illegitimate ownership of a property and assets that are the proceeds of their criminal activities.
Financing of Terrorism: Includes activities that provide both legitimate and illegitimate money characterized by the concealment of the origin or intended criminal use of the funds
Know Your Customer: This entails due diligence activities of obtaining and verifying customer identity preservation of records of customers and mandatory disclosure of transactions to authorized statutory bodies
Customer Due Diligence: This covers steps to identify clients and validate their identities
Politically Exposed Persons (“PEPs”): Individuals who are or have been entrusted with prominent public functions in any country; generally present a higher risk for potential involvement in bribery and corruption of their position and the influence that they may hold

Policy Statement

The following statements shall guide the principles and procedures for AML/CFT compliance. Kudy shall:

Formulate and implement internal controls and other procedures that will deter criminals from using its facilities for money laundering and terrorist financing and ensure that its obligations under substituting laws and Regulations are met.
Designate AML/CFT Compliance Officer at the Management level, with the relevant competence, authority, and independence to implement Kudy’s AML/CFT compliance programme
Comply with the requirements of the Money Laundering (Prevention and Prohibition) Act, 2022, Terrorism (Prevention and Prohibition) Act, 2022 and other relevant laws and Regulations
Comply promptly with all the requests made according to subsisting laws and Regulations and shall provide relevant information to the SEC and the Nigerian Financial Intelligence Unit (“NFIU”) and other relevant law enforcement agencies on the AML/CFT matters
Identify and report to the NFIU, in the course of its business, any suspicious transactions derived from the criminal activities defined in AML/CFT SEC Regulations.
Ensure the implementation of the requirements of the AML/CFT regulations is not inhibited through Kudy’s Confidentiality Agreement/Policy
Exit relationships which pose heightened money laundering risks to Kudy
Efficiently communicate the Policy to raise the level of staff awareness of AML.CFT issues.

General

Know your customer

KYC is the due diligence that Capital Market Operators, Financial Market Infrastructures, and other regulated companies must perform to identify their clients and ascertain relevant information before carrying out any financial businesses with them. A client for this KYC segment is defined as:

An entity that has a business relationship with Kudy
Any entity connected with a financial transaction, which can pose significant or other risks to Kudy

Specifically, in dealing with clients, Kudy shall:

Obtain the necessary documents and information from every client (anyone who Kudy receives money from to provide a business)
Report to the regulatory authorizes on suspicious transactions, which may ultimately have a bearing on money laundering activities
Update client information as frequently as practicable
Identify the clients, as well as their beneficial owners and verify such client’s identity using reliable, independent sources documents, data, or information
Conduct independent verification of the legal status of incorporated entities and sole proprietorships with the Corporate Affairs Commission, in writing
Refuse to transact business with “shell companies” as described under the International Conventions
Perform enhanced due diligence for higher-risk clients, business relationships or transactions, including:
- Politically Exposed Persons (PEPs), cross-border transactions and business relationship
- Any other business, activities or profession as any be prescribed by regulatory, supervisory, and competent authorities.

Record Keeping and Retention Requirements

Kudy shall maintain all necessary records of transactions, both domestic and international for at least five (5) years after completion of the transactions or such a longer period as may be required by the SEC or NFIU. Records of all suspicious transactions shall be kept for the same period.

Requests for AML Records by Regulatory and Law Enforcement

Upon request by a regulatory or law enforcement agency, Kudy shall make available records related to AML/CFT compliance or its clients as soon as possible from the date of the request.

Transaction Reporting

Kudy shall exercise due diligence in identifying and reporting a suspicious transaction. Suspicious transactions shall include:

Transaction belonging to entities considered to be terrorist organizations
Transactions which are structured to avoid reporting and record-keeping requirements
Altered or false identification or inconsistent information or any transaction involving criminal activities in Kudy’s view

Kudy shall ensure timely and accurate rendition of all AML/CFT returns as specified in the SEC AML/CFT Rules as well as relevant Regulations/ACT/Guidelines/Circulars that may be issued from time to time by relevant regulatory agencies.

Politically Exposed Persons

Business relationships with family members or close associates of PEPs involve reputational risks similar to those of PEPs themselves. Kudy shall evaluate the risks to its business operations when dealing with PEPs. The following shall guide the identification of PEPs’ risk characteristics:

Nature of the client and the client’s business: the source of the client’s wealth, the nature of the client’s business and the extent to which the client’s business history presents an increased risk for money laundering and terrorist financing.
Purpose and activity: the size, purpose, and services involved in the relationship
Relationship: the nature and duration of Kudy’s relationship with the client
Client structure
Public information: information is known or reasonably available to Kudy about the client

responsibilities

Board of Directors

The Board of Directors (“Board”) responsibilities include, but not limited to:

Decision-making based on quarterly received on AML/CFT report
Ensuring an operational AML/CFT Policy is formulated by Management and reviewed, as may be required
Ratifying the AML/CFT Policy as approved by the Board’s Regulation, Risk and Audit Committee

Board Committee

The Board’s Committee’s responsibilities include, but are not limited to:

Approving the AML/CFT Policy
Reviewing all periodic reports on AML/CFT matters
Guiding the management of AML/CFT compliance risks

Managing Director

The Managing Director’s responsibilities include, but are not limited to:

Ensuring that adequate are in place to mitigate the identified compliance risks
Developing an AML/CFT Policy
Managing compliance risks in Kudy
Ensuring implementation of Board decisions on compliance matters
Ensuring that processes are efficient and following applicable laws and policies

Compliance Officer

The Compliance Officer’s responsibilities include, but are not limited to:

Developing an AML/CFT Compliance Program
Rending returns on Foreign Exchange Transaction reports to the SEC and the NFIU
Rendering “NIL” reports with the NFIU and SEC, where necessary to ensure compliance
Coordination of the training of staff in AML/CFT awareness, detection methods and reporting requirements
Serving as liaison officer for both the SEC and NFIU

Internal Audit

The Internal Auditor’s responsibilities include, but are not limited to:

Incorporating compliance testing into their normal audit program
Reporting on results of the independent testing to the Board through the MD, as well as the Board committee
Carrying out an independent review of the Policy and assuring the Board, Board Committee and Management.

All Staff

The responsibilities of Kudy’s staff include, but are not limited to:

Implementing the measures and approaches diligently and to the best of their ability
Familiarize themselves with guidelines, policies and best practices relating to their respective areas of responsibility
Reporting any legal violations or other forms of misconduct following Kudy’s Policies and Procedures.

Conducting Reviews and Assessment

The Compliance Officer shall undertake the review of the AML/CFT Policy annually, except in certain situations where new AML/CFT Regulations are introduced which would necessitate an earlier review/update of the Policy. The Board is saddled with the overall responsibility to approve the AML/CFT Policy and other updates or amendments to same, upon same being first considered by the Board’s committee

kudy's duties

Governance/Independence

The Compliance Officer shall establish the requisite compliance tools (such as the compliance framework, register, tracker etc) that are independent of operational departments and Management of Kudy and shall ensure that Kudy’s compliance structure is adequately governed. Kudy staff shall be responsible for reporting all compliance issues to the Compliance Officer.

Compliance with External Regulation

Kudy shall conduct its business in a manner that promotes a robust AML/CFT compliance culture in all its operations to ensure one hundred per cent (100%) compliance with applicable laws, regulations, rules, and guidelines, and zero tolerance with regulatory sanctions.

Consequences

A breach of the AML/CFT laws is a serious offence and could result in lengthy investigations, significant fines and criminal sanctions (including imprisonment of employees).

Have any questions?

Need more information about our Funds and other services we offer?

Anti-money Laundering Policy

Have any questions?

Say Hi

experience@kudy.ng