Purpose

The purpose of this Know Your Customer (KYC) Policy is to ensure that LHFX, a broker authorized and regulated by the Financial Services Commission Mauritius under the Investment Dealer license number GB23202204, Code SEC-2.1B Office Address: Suite 102, 1st Floor, Sterling Tower, 14 Poudriere Street, Port-Louis, Mauritius, complies with relevant anti-money laundering (AML) regulations, combats financial crimes, and safeguards the company and its clients against fraud. This policy outlines the procedures for verifying the identity of clients and monitoring their activities to ensure they are consistent with their risk profile.

Scope

This policy applies to all employees, officers, directors, contractors, and agents of LHFX (collectively referred to as "Covered Persons"). It covers all aspects of client identification, verification, and monitoring.

Client Identification and Verification

1. Individual Clients
   For individual clients, the following information must be collected and verified:
   • Full Name
   • Date of Birth
   • Residential Address
   • Nationality
   • Contact Information (Phone Number and Email Address)
   • Government-issued Identification (Passport, National ID, or Driver’s License)
   • Proof of Address (Utility Bill, Bank Statement, or Government Correspondence not older than 3 months)
   • Proof of source of funds
2. Verification Procedures
   The verification of client information will be conducted through:
   • Document Verification: Reviewing government-issued identification documents and proof of address.
   • Electronic Verification: Using third-party databases and electronic identity verification services.
   • Face-to-Face Verification: In cases of higher risk, conducting in-person meetings or video calls to verify identity.

Risk Assessment and Due Diligence

1. Risk Assessment
   Clients will be classified into risk categories (low, medium, high) based on factors such as:
   • Geographic Location: Higher risk for clients from jurisdictions with weak AML regulations.
   • Nature of Business: Higher risk for clients engaged in high-risk industries (e.g., gaming, cryptocurrency).
   • Transaction Patterns: Higher risk for clients with unusual or complex transactions.
2. Due Diligence
   • Standard Due Diligence (SDD): Applied to low and medium-risk clients, involving basic identification and verification procedures.
   • Enhanced Due Diligence (EDD): Applied to high-risk clients, requiring additional information and verification, such as the source of funds and wealth.

Ongoing Monitoring

Ongoing monitoring of client transactions and activities will be conducted to ensure they are consistent with the client's risk profile and to identify suspicious activities. This includes:

• Transaction Monitoring: Reviewing transactions for unusual patterns, sizes, or frequencies.
• Periodic Review: Regularly updating client information and risk assessments.
• Automated Systems: Utilizing software tools for real-time monitoring and alerts.

Record-Keeping

Records of client identification, verification, and transactions will be maintained for at least five years after the end of the client relationship. These records include:

• Identification Documents
• Verification Documents
• Transaction Records
• Risk Assessments
• Communication Log

Reporting and Escalation

Suspicious activities must be reported to the Money Laundering Reporting Officer (MLRO). The MLRO will review the report and, if necessary, file a Suspicious Activity Report (SAR) with the relevant authorities in Mauritius. Employees must not disclose to the client that a SAR has been filed (tipping off).

Training and Awareness

LHFX will provide regular training to Covered Persons on KYC and AML regulations, the importance of client identification and verification, and the procedures for monitoring and reporting suspicious activities. Training will be conducted upon hiring and periodically thereafter.

Consequences of Non-Compliance

Failure to comply with this KYC Policy may result in disciplinary action, up to and including termination of employment or contract. LHFX reserves the right to take legal action if necessary.

Review and Amendments

This policy will be reviewed annually and updated as needed to ensure its effectiveness and compliance with regulatory changes. Any amendments to the policy will be communicated to all Covered Persons.