1. 1. What does this have to do with opening a Trading/Demat account?

    The first step in the money laundering process for criminals is to get their money into an account with a bank or financial intermediary, often using a false identity and address. The funds deposited are then transferred to other accounts, locally or abroad, or used to buy goods or services. This transaction may appear to be like any legally earned money, making it difficult to trace back to its criminal origin. SEBI-registered intermediaries under the law should not only prevent this but also stop criminals who wish to use the banking and financial channels to launder ill-gotten money from illegal or criminal activities.


  3. 2. How could money laundering affect you as a customer?

    A key defense against money laundering is preventing accounts from being opened in false identities. Anyone wishing to open an account will be asked for proof of their identity, address, and signature. These documents are essential regardless of the type of account or its purpose. The fact that these documents are requested for the account opening does not mean that the customer is suspected of money laundering. Criminals may try to appear as normal, law-abiding customers, for example, by attempting to open multiple accounts with small amounts of money. Therefore, it is necessary to identify all prospective account holders or customers. Anybody, including a criminal, could falsely use your identity if these identity documents are not obtained.


  5. 3. What are the responsibilities of a client related to money laundering?

    Upstox has to conduct ongoing due diligence and scrutiny, i.e., perform continuous scrutiny of transactions and accounts throughout the business relationship to ensure that the transactions conducted are consistent with the registered intermediary’s knowledge of the customer, its business, and risk profile. Clients should provide Upstox with updated details of their occupation, source of income, and details of their annual income and net worth annually. Furthermore, they should provide an explanation for any trading pattern observed by Upstox in its routine course.