Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policy

1. INTRODUCTION

Nxg Markets Ltd (“the Company”) is steadfastly committed to maintaining the highest standards of compliance with all applicable Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws, regulations, and guidelines. This policy supports the Company’s obligation to assist governmental and regulatory authorities in the detection and prevention of money laundering, terrorist financing, and other illicit financial activities.

The Company acknowledges that money laundering is a criminal offense involving the processing of criminally-derived funds to disguise their illegal origin and integrate them into the legitimate financial system. Terrorist financing involves providing financial support to terrorist organizations or acts. Both present significant risks to the integrity and reputation of the financial sector.

2. SCOPE AND OBJECTIVE

This AML/CTF Policy governs all employees, directors, agents, and clients of Nxg Markets Ltd. Its primary objective is to establish a robust framework for the identification, assessment, management, and mitigation of money laundering and terrorist financing risks consistent with international standards, including but not limited to the Financial Action Task Force (FATF) Recommendations.

3. DEFINITIONS AND MONEY LAUNDERING STAGES

Money laundering is a multifaceted process involving the concealment and manipulation of illicit proceeds to evade detection and regulatory scrutiny. It generally comprises three principal stages:

1. Placement: The initial phase wherein illicit proceeds are introduced into the formal financial system using structured deposits, intermediaries, or other methods to circumvent detection.
2. Layering: A series of complex financial maneuvers intended to obscure the origin of funds through multiple transactions, shell companies, and cross-border transfers.
3. Integration: Illicit funds are assimilated back into the legitimate economy through investments or business ventures, making them appear lawful.

4. AML/CTF COMPLIANCE FRAMEWORK

• Governance: Oversight provided by the Board of Directors and Compliance Committee.
• Compliance Officer: A designated MLRO ensures compliance, investigations, and regulatory liaison.

5. CUSTOMER DUE DILIGENCE (CDD) AND KNOW YOUR CUSTOMER (KYC)

Nxg Markets Ltd adheres to rigorous CDD and KYC procedures before establishing business relationships or conducting transactions:

• Verification of identity through independent documents.
• Enhanced Due Diligence for high-risk customers such as PEPs or complex ownership structures.
• Ongoing monitoring of transactions to detect suspicious activities.

Individual Clients:

• Valid government-issued ID.
• Proof of residential address dated within the last three months.
• Notarized translations for non-Latin scripts.

Corporate Clients:

• Company registration documents and beneficial ownership details.
• Board resolutions authorizing account operations.
• Director and beneficial owner identification per individual KYC standards.

6. TRANSACTION MONITORING AND REPORTING

Nxg Markets Ltd employs automated systems and manual reviews to detect transactions inconsistent with a customer’s profile. Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SARs) are filed with relevant authorities as required.

7. RECORD KEEPING

The company maintains detailed records of customer identification, transactions, and AML monitoring for at least five (5) years, ensuring integrity, confidentiality, and compliance with all regulatory obligations.

8. RISK MITIGATION MEASURES

• Client risk profiling and periodic reassessment.
• Enhanced scrutiny for high-risk jurisdictions.
• Account suspension or termination where illicit activity is suspected.
• Full cooperation with law enforcement and regulators.

9. STAFF TRAINING AND AWARENESS

Nxg Markets Ltd provides ongoing AML/CTF training to ensure employees understand compliance duties, reporting obligations, and evolving regulatory requirements.

10. POLICY REVIEW AND UPDATING

This AML/CTF Policy is reviewed annually and updated as necessary to remain compliant with regulatory changes and best practices.

11. NON-COMPLIANCE AND SANCTIONS

Violations of this policy may result in disciplinary action, account termination, or legal reporting in accordance with applicable laws.

12. CONTACT AND REPORTING

All employees and third parties must report suspicious activities to the MLRO, who will escalate matters to relevant authorities as required.