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Anti-Money Laundering (AML) Policy:

Preliminary Compliance and Supervisory Procedures

1.    Company Policy

It is the policy of the company to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities by complying with all applicable requirements under the Bank Secrecy Act (BSA) and its implementing regulations.

Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the "placement" stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler's checks, or deposited into accounts at financial institutions. At the "layering" stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the "integration" stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.  

Although cash is rarely deposited into securities accounts, the securities industry is unique in that it can be used to launder funds obtained elsewhere, and to generate illicit funds within the industry itself through fraudulent activities. Examples of types of fraudulent activities include insider trading, market manipulation, ponzi schemes, cybercrime and other investment-related fraudulent activity.

Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.

Our AML policies, procedures and internal controls are designed to ensure compliance with all applicable BSA regulations, FINRA rules, FATF, CFT, Central Banks & financial authorities globally, and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.


2.    AML Compliance Person Designation and Duties 
The company has designated Mr. Lee Anselmo Blackman as its Anti-Money Laundering Program Compliance Person (AML Compliance Person), with full responsibility for the company’s AML program. Mr. Blackman has a working knowledge of the BSA and its implementing regulations and is qualified by experience, knowledge and training, including working with financial and banking platforms for authenticating documents, accounts, securities, etc. The duties of the AML Compliance Person will include monitoring the company’s compliance with AML obligations, overseeing communication and training for employees, and the reviewing KYC compliance documents of potential clients, joint venture partners and investors. The AML Compliance Person will also ensure that the company keeps and maintains all of the required AML records and will ensure that Suspicious Activity Reports (SARs) are filed with the respective financial crime enforcement agency in the respective jurisdiction of the transaction when appropriate. The AML Compliance Person is vested with full responsibility and authority to enforce the company’s AML program.  

The company will provide the respective financial authority or agency, with contact information for the AML Compliance Person through the financial reporting authority contact system or contact details, including: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile (if any). The company will promptly notify the respective authorities of any change in this information through the reporting system or contact information, and will review, and if necessary, update this information within 30 business days after the end of each calendar year. The annual review of this information will be conducted by Lee Anselmo Blackman and will be completed with all necessary updates being provided no later than 30 business days following the end of each calendar year. In addition, if there is any change to the information, Lee Anselmo Blackman will update the information promptly, but in any event not later than 30 days following the change. 


3.    Giving AML Information to Law Enforcement Agencies and Other Financial Institutions
a.    Financial Authorities or Agency Requests Under Financial and Banking Regulations & Law
We will respond to a financial crimes enforcement agency’s request concerning accounts and transactions by immediately searching our records to determine whether we maintain or have maintained any transaction with, or have engaged in any illegal or money laundering transaction with such an individual, entity or organization named by the respective agency.


We understand that we have 10 days from the transmission date of the request to respond to such a request. We will designate one or more persons to be the point of contact (POC) for such requests, and will promptly update the POC information following any change in such information. Unless otherwise stated in the request or specified by the financial authority, we are required to search those documents outlined by the authorities. If we find a match, Mr. Lee Anselmo Blackman will report it to the respective authority via a secure information system, or their contact info within 10 days or within the time requested by the financial authority in the request. If the search parameters differ from those mentioned above, Mr. Lee Anselmo Blackman will structure our search accordingly.

If Mr. Lee Anselmo Blackman searches our records and does not find a matching account or transaction, then he will not reply to such a Request. We will maintain documentation that we have performed the required search, for example; by printing a search self-verification document from an authorized secure information sharing platform or system confirming that our company has searched for the subject information or individual or corporation against our records. This will be further supported by us maintaining a log showing the date of the request, the number of transactions searched, the name of the individual conducting the search and a notation of whether or not a match was found.

We will not disclose the fact that the financial authority has requested or obtained information from us, except to the extent necessary to comply with the information request. Mr. Lee Anselmo Blackman will review, maintain and implement procedures to protect the security and confidentiality of requests from financial authorities or agencies similar to those procedures established to satisfy the requirements of the financial authority or agency with regard to the protection of customers’ nonpublic information.  

We will direct any questions we have to the respective law enforcement agency as designated in their request.    

Unless otherwise stated in the 314(a) Request, we will not be required to treat the information request as continuing in nature, and we will not be required to treat the periodic 314(a) Requests as a government provided list of suspected terrorists for purposes of the customer identification and verification requirements. 

    
b.    National Security Letters

We understand that the receipt of a National Security Letter (NSL) is highly confidential. We understand that none of our officers, employees or agents may directly or indirectly disclose to any person that the financial, law enforcement authority or any other federal government authority, has sought or obtained access to any of our records. To maintain the confidentiality of any NSL we receive, we will process and maintain the NSL by firstly verifying the NSL document directly with the office & signatory of the document, then contact our legal representative, and only after legal counsel, then disclose the information requested through our law firm. If we file a suspicious activity report after receiving an NSL, the suspicious activity report will not contain any reference to the receipt or existence of the NSL. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.  


c.        Grand Jury Subpoenas

We understand that the receipt of a grand jury subpoena concerning a customer does not in itself require that we file a Suspicious Activity Report (SAR). When we receive a grand jury subpoena, we will conduct a risk assessment of the customer subject to the subpoena as well as review the customer’s business activity. If we uncover suspicious activity during our risk assessment and review, we will elevate that customer’s risk assessment and file a SAR in accordance with the SAR filing requirements. We understand that none of our officers, employees or agents may directly or indirectly disclose to the person who is the subject of the subpoena its existence, its contents or the information we used to respond to it. To maintain the confidentiality of any grand jury subpoena we receive, we will process and maintain the subpoena by firstly verifying the GJS document directly with the office & signatory of the document, then contact our legal representative, and only after legal counsel, then disclose the information requested through our law firm]. If we file a SAR after receiving a grand jury subpoena, the SAR will not contain any reference to the receipt or existence of the subpoena. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.  


d.    Voluntary Information Sharing with Other Financial Institutions 
We will share information with other financial institutions regarding individuals, entities, organizations and countries for purposes of identifying and, where appropriate, reporting activities that we suspect may involve possible terrorist activity or money laundering. Mr. Lee Anselmo Blackman will ensure that the company files with the financial authority or agency, an initial notice before any sharing occurs and annual notices thereafter. Before we share information with another financial institution, we will take reasonable steps to verify that the other financial institution has submitted the requisite notice to the financial authority or agency, either by obtaining confirmation from the financial institution or by consulting a list of such financial institutions that central bank or financial authority or agency will make available. We understand that this requirement applies even to financial institutions with which we are affiliated, and that we will obtain the requisite notices from affiliates and follow all required procedures.  

We will employ strict procedures both to ensure that only relevant information is shared and to protect the security and confidentiality of this information.

We also will employ procedures to ensure that any information received from another financial institution shall not be used for any purpose other than:

•    identifying and, where appropriate, reporting on money laundering or terrorist activities;

•    determining whether to establish or maintain an account, or to engage in a transaction; or 

•    assisting the financial institution in complying with performing such activities.


e.    Joint Filing of SARs by Broker-Dealers and Other Financial Institutions

We will file joint SARs in the following circumstances, according to the requirements and procedures of the financial authority or agency of the jurisdiction of the transaction. We will also share information about a particular suspicious transaction with any broker-dealer, as appropriate, involved in that particular transaction for purposes of determining whether we will file jointly a SAR. 

In the event an introducing company is involved in a transaction, we will share information about particular suspicious transactions with our clearing broker, for purposes of determining whether we and our clearing broker will file jointly a SAR. In cases in which we file a joint SAR for a transaction that has been handled both by us and by the clearing broker, we may share with the clearing broker a copy of the filed SAR.  

If we determine it is appropriate to jointly file a SAR, we understand that we cannot disclose that we have filed a SAR to any financial institution except the financial institution that is filing jointly. If we determine it is not appropriate to file jointly, we understand that we cannot disclose that we have filed a SAR to any other financial institution or insurance company. 

 

4.    Customer Identification Program

In addition to the information, we must collect under international AML (Know Your Customer) and Regulation Best Interest, we have established, documented and maintained a written Customer Identification Program (CIP). We will collect certain minimum customer identification information from each customer, members, joint venture partner or investor who intends to do business with the company. We utilize risk-based measures to verify the identity of each customer, members, joint venture partner or investor. Recording customer, member, joint venture partner or investor identification information and the verification methods and results; provide the required adequate CIP notice to customers that we will seek identification information to verify their identities; and compare customer identification information with government-provided lists of suspected terrorists, once such lists have been issued by the government. 

We do not accept or do business with customers, members, joint venture partners or investors if we do not establish formal relationships with “them” for the purpose of effecting transactions in private equity, investments and international trade. If in the future the company elects to open customer accounts or to establish formal relationships with customers for the purpose of effecting transactions in securities, we will first establish, document and ensure the implementation of appropriate CIP procedures. 


a.    Required Customer Information

Prior to doing business with any individual or corporation, Mr. Lee Anselmo Blackman or executive task with the responsibility, will collect the following information for all members, joint venture partners or investors, if applicable:

 
(1) the name; 


(2) date of birth (for an individual); 


(3) an address, which will be a residential or business street address (for an individual), residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address), or a principal place of business, local office, or other physical location (for a person other than an individual); and

 
(4) an identification number, which will be a taxpayer identification number, or one or more of the following: a taxpayer identification number, passport number and country of issuance, alien identification card number, or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard.


b.    Customers Who Refuse to Provide Information  

If a potential or existing member, joint venture partner or investor either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our company will not indulge in and or immediately terminate any business with the person or entity, after considering the risks involved. In either case, our AML Compliance Person will be notified so that we can determine whether we should report the situation to financial or law enforcement agencies on a SAR.  

c.    Verifying Information 
Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers. Lee A. Blackman will analyze the information we obtain to determine whether the information is sufficient to form a reasonable belief that we know the true identity of the customer (e.g., whether the information is logical or contains inconsistencies).   

We will verify customer identity through documentary means, non-documentary means or both. We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non-documentary means described below whenever necessary. We may also use non-documentary means, if we are still uncertain about whether we know the true identity of the customer. In verifying the information, we will consider whether the identifying information that we receive, such as the customer’s name, street address, zip code, telephone number (if provided) and date of birth, allow us to determine that we have a reasonable belief that we know the true identity of the customer (e.g., whether the information is logical or contains inconsistencies). 

Appropriate documents for verifying the identity of customers include the following: 

•    For an individual, an unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard, such as a driver’s license or passport; and

•    For a person other than an individual, documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

We understand that we are not required to take steps to determine whether the document that the customer has provided to us for identity verification has been validly issued and that we may rely on a government-issued identification as verification of a customer’s identity. If, however, we note that the document shows some obvious form of fraud, we must consider that factor in determining whether we can form a reasonable belief that we know the customer’s true identity.

We will use the following non-documentary methods of verifying identity:

•    Independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from a consumer reporting agency, public database or other source. 

•    Checking references with other financial institutions; or 

•    Obtaining a financial statement.

•    Non-documentary methods, including video conference calling, previous bank reference, Customer telephone call, chamber of commerce, etc.

We will use non-documentary methods of verification when: 

(1) the customer is unable to present an unexpired government-issued identification document with a photograph or other similar safeguard; 


(2) the company is unfamiliar with the documents the customer presents for identification verification; 


(3) the customer and company do not have face-to-face contact; and 


(4) there are other circumstances that increase the risk that the company will be unable to verify the true identity of the customer through documentary means.  

We will verify the information within a reasonable time before or after the transaction is accepted and approved. Depending on the nature and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may, pending verification, restrict the types of transactions or dollar amount of transactions. If we find suspicious information that indicates possible money laundering, terrorist financing activity, or other suspicious activity, we will, after internal consultation with the company's AML Compliance Person, file a SAR in accordance with applicable laws and regulations.


d.    Lack of Verification

When we cannot form a reasonable belief that we know the true identity of a customer, we will do the following: (1) not entertain a transaction; (2) impose terms under which a customer may conduct transactions while we attempt to verify the customer’s identity; (3) close an account after attempts to verify a customer’s identity fail; and (4) determine whether it is necessary to file a SAR in accordance with applicable laws and regulations.


e.    Recordkeeping

We will document our verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancies identified in the verification process. We will keep records containing a description of any document that we relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date. With respect to non-documentary verification, we will retain documents that describe the methods and the results of any measures we took to verify the identity of a customer. We will also keep records containing a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained. We will retain records of all identification information for two years after the transaction has been closed; we will retain records made about verification of the customer's identity for three years after the record is made. 

f.    Comparison with Government-Provided Lists of Terrorists

At such time as we receive notice that a federal government agency has issued a list of known or suspected terrorists and identified the list as a list for CIP purposes, we will, within a reasonable period of time after an transaction has been executed (or earlier, if required by another federal law or regulation or federal directive issued in connection with an applicable list), determine whether a customer appears on any such list of known or suspected terrorists or terrorist organizations issued by any federal government agency and designated as such by Treasury in consultation with the federal functional regulators. We will follow all federal directives issued in connection with such lists.    


5.    AML Recordkeeping 

a.    Responsibility for Required AML Records and SAR Filing 
Our AML Compliance Person and his or her designee will be responsible for ensuring that AML records are maintained properly and that SARs are filed as required. 

In addition, as part of our AML program, our company will create and maintain SARs, and relevant documentation on customer identity and verification and funds transmittals. We will maintain SARs and their accompanying documentation for at least two years. We will keep other documents according to existing BSA and other recordkeeping requirements up to three years  


6.    Clearing/Introducing Company Relationships
We will work closely with our clearing company to detect money laundering. We will exchange information, records, data and exception reports as necessary to comply with our contractual obligations and with AML laws. As a general matter, we will obtain and use the following exception reports offered by our clearing associate in order to monitor customer activity and we will provide our clearing company with proper customer identification and due diligence information as required to successfully monitor customer transactions. We have discussed how each company will apportion customer and transaction functions and how we will share information and set forth our understanding in a written document. We understand that the apportionment of functions will not relieve either of us from our independent obligation to comply with AML laws, except as specifically allowed under the BSA and its implementing regulations.


7.    Training Programs
We will develop ongoing employee training under the leadership of the AML Compliance Person and senior management. Our training will occur on at least an annual basis. It will be based on our company’s size, its customer base, and its resources and be updated as necessary to reflect any new developments in the law.

Our training will include, at a minimum: (1) how to identify red flags and signs of money laundering that arise during the course of the employees’ duties; (2) what to do once the risk is identified (including how, when and to whom to escalate unusual customer activity or other red flags for analysis and, where appropriate, the filing of SARs); (3) what employees' roles are in the company's compliance efforts and how to perform them; (4) the company's record retention policy; and (5) the disciplinary consequences (including civil and criminal penalties) for non-compliance with the BSA. 

We will develop training in our company, or contract for it. Delivery of the training may include educational pamphlets, videos, intranet systems, in-person lectures and explanatory memos. We will maintain records to show the persons trained, the dates of training and the subject matter of their training. 

We will review our operations to see if certain employees, such as those in compliance, margin and corporate security, require specialized additional training. Our written procedures will be updated to reflect any such changes.  


8.    Monitoring Employee Conduct and Transaction
We will subject employee transactions to the same AML procedures as customer transactions, under the supervision of the AML Compliance Person. We will also review the AML performance of supervisors, as part of their annual performance review. The AML Compliance Person’s transaction will be reviewed by Mr. Curtis R. Helligar, another member of senior management.


9.    Confidential Reporting of AML Non-Compliance
Employees will promptly report any potential violations of the company’s AML compliance program to the AML Compliance Person, unless the violations implicate the AML Compliance Person, in which case the employee shall report to the president/chairman of the board/audit committee chair. Such reports will be confidential, and the employee will suffer no retaliation for making them.

 

10.     Senior Manager Approval  
Senior management has approved this AML compliance program in writing as reasonably designed to achieve and monitor our company’s ongoing compliance with the requirements of the BSA and the implementing regulations under it. This approval is indicated by signatures below.

 

Name: Mr. Curtis R. Helligar                Name: Mr. Lee A. Blackman

Title: Managing Member                Title: Managing Member


 

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