|
The law requires that persons carrying on financial business to retain records concerning client identification and details of transactions for use as evidence in any possible investigation into money laundering. This is an essential constituent of the audit trail procedures that ConscribNet™ seeks to establish. The records prepared and maintained by any member, participant, special purpose user, or trading house and their respective portfolio manager or custodian as appropriate on its client relationships and transactions should be such that: |
|
requirements of legislation are fully met; |
|
competent third parties will be able to assess the member, participant, special purpose user, or trading house’s portfolio manager’s or custodian’s observance of money laundering prevention policies and procedures; |
|
any transactions effected via the institution can be reconstructed; and |
|
the institution can satisfy within a reasonable time any enquiries or court orders from the appropriate authorities as to disclosure of information. |
| HD Faculty™ requires all relevant records to be retained for at least eight years (8) from the
date of completion of the business. However, where the records relate to on-going investigations, they should be retained until the Unit confirms that the case has been closed. |
|
|
| ConscribNet™ specifies that, where evidence of a person’s identity is required, the records retained must include the following: |
(a) |
A record
that indicates the nature of a person’s identity obtained in
accordance with the procedures provided by HD Faculty™
and
which comprises either a copy of the evidence or which provides sufficient
information to enable details as to a person’s identity to be
re-obtained. |
(b) |
A record containing details relating to all transactions carried out by that person in the course of financial business. The prescribed record retention period is at least seven (7) years commencing on the date on which the relevant business or all activities taking place in the course of transactions were completed. |
|
In accordance with the law, the date when the relationship with the Client has ended is the date of: |
|
|
the carrying out of an one-off transaction or the last in the series of one-off transactions; |
|
|
the termination of the business relationship i.e. the closing of the account(s); |
|
|
if the business relationship has not formally ended, the date of which the last transaction was carried out. |
|
|
| The precise nature of the records required is not specified but the objective is to ensure that in any subsequent investigation the member, participant, special purpose user, or trading house and its portfolio manager or custodian as appropriate can provide the Unit with their part of the audit trail. For each transaction, consideration should be given to retaining a record of: |
|
the name and address of its client; |
|
the name and address (or identification code) of its counterpart; |
|
the investment dealt in, including price and size; |
|
whether the transaction was a purchase or a sale; |
|
the form of instruction or authority;
|
|
the account details from which the funds were paid (including, in the case of cheques, sort code, account number and name); |
|
the form and destination of payment made by the business to the Client; |
|
whether the investment were held in safe custody by the business or sent to the Client or to his or her order and, if so, to what name and address. |
|
Format and retrieval of Records |
It is recognized that the retention of hard-copy evidence creates excessive volume of records to be stored. Therefore, retention may be in other formats other than original documents, such as electronic or other form. The overriding objective is for the member, participant, special purpose user, or trading house and its authorized agents, and/or portfolio managers as appropriate to be able to retrieve the relevant information in a legal acceptable format without undue delay and in a cost effective manner. |
| When setting a document retention policy, registered members, participants, special purpose users, and trading houses and their authorized agents, and/or portfolio managers as appropriate are therefore advised to consider both the statutory requirements and the potential needs of the Unit. |
| ConscribNet™ provides that where relevant information is contained in a computer, the information must be presented in a visible and legible form which can be taken away by the Unit. |
