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State Street

Know Your Customer at State Street Storyboard

Storyboard

Know Your Customer at State Street

State Street


DOCUMENT HISTORY

Created/Revised By

Revision Details Created/Revised on Version No

Pooja Zaware Initial Draft Nov 19, 2014 0.1Shweta Mukherjee Client Feedback

ImplementationNov 24, 2014 1.0

Vikas Salgaonkar Client Feedback Implementation

Nov 25, 2014 1.1

Shweta Mukherjee Client Feedback Implementation

Nov 26, 2014 1.2

Shweta Mukherjee ID Review Dec 3, 2014 1.3Shweta Mukherjee Client Feedback

ImplementationDec 5, 2014 1.4


Dec 8, 2014 1.5


Dec 9, 2014 1.6


Dec 10, 2014 1.7


Dec 11, 2014 1.8


Dec 12, 2014 1.9


Dec 19, 2014 2.0

Priya Tiwari Client Feedback Implementation

Dec 23, 2014 2.1

Shweta Mukherjee ID Review Dec 25, 2014 2.2Shweta Mukherjee QA Review Dec 26, 2014 2.3Vikas Salgaonkar Client Feedback Jan 2, 2015 2.4

State Street


ImplementationVikas Salgaonkar Changes Verification Jan 5, 2015 2.5Vikas Salgaonkar Client Feedback

ImplementationJan 6, 2015 2.6


Jan 6, 2015 2.7

Pooja Zaware Removed highlights and comments

Jan 8, 2015 2.8


Jan 12, 2015 2.9


Jan 13, 2015 3.0


Jan 13, 2015 3.1


Jan 14, 2015 3.2

Priya Tiwari ID Review Changes Jan 14, 2015 3.3Vikas Salgaonkar Verification Jan 15, 2015 3.4Vikas Salgaonkar Verification After QA Jan 15, 2015 3.5

Priya Tiwari Global Changes Jan 16, 2015 3.6Kavita Nair Client Feedback

ImplementationJan 19, 2015 3.7

Pooja Zaware SB changes Jan 20, 2015 3.8Pooja Zaware Verification Jan 20, 2015 3.9

Vikas Salgaonkar Changes after proof reading

Jan 22, 2015 4.0


Jan 27, 2015 4.1


Jan 28, 2015 4.2


Feb 2, 2015 4.3

Priya Tiwari Client Feedback Implementation

Feb 3, 2015 4.4

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Feb 4, 2015 4.5


Feb 9, 2015 4.6


Feb 10, 2015 4.7


Feb 11, 2015 4.8

Pooja Zaware Client Feedback Implementation

March 23, 2015 4.9

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What is a Storyboard?

A storyboard or script is the preliminary version of detailed content and descriptions of the multimedia elements that will be integrated into the WBT course.

What should you review?

Does the content meet the goals of the client training requirement? Is the information presented accurate? Does the flow of the content meet the instructional requirement? Do the graphics and animations illustrate the key learning points? Do the simulations and scenarios illustrate the key learning points? Does the text read appropriately?

How should you review or provide feedback?

To activate the ‘Track Changes’ option in MS Word:

1. On the Review tab, click the Track Changes option in the Tracking section or2. Expand the Track Changes option3. Select Track Changes

In some of the version of MS Word, you can activate the Track Changes option by selecting it from the Tools menu.

For content language review:

Onscreen text Transcript/voice-over text (VO)

For ID review:

Onscreen text Graphic Descriptions Transcript/Voice Over

State Street


Instructions for integration or development Other specifications

State Street

Know Your Customer (KYC) at State Street Storyboard

Module Name: Know Your Customer at State Street

Slide Name: Module Objectives

Screen No: 01

On-Screen Text Graphics Description

By the end of this module, you will be able to:

Describe State Street’s Risk-Based Approach and how to prevent and mitigate risks.

Define the three components of Know Your Customer (KYC) used to onboard a customer.

Differentiate between the roles and responsibilities of the First, Second, and Third Lines of Defense.

Differentiate between a customer and an account. Identify the various AML Toolkit components. Utilize the standard risk forms (EDD Customer Profile

and the Low/Medium and High Periodic Review forms) as part of the KYC process.

To continue, click Next.

Display the OST in progressive disclosure format.

141946057

Display the above image in sync with text.

The next button should be activated only when the entire OST is displayed.

TranscriptNAInteractivitiesNACourse NavigationPrevious < NA Next > 02Module Name: Know Your Customer at State Street

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Slide Name: Risk-Based Approach

Screen No: 02


The AML and Sanctions Programs were developed using a Risk-Based Approach. This approach allows State Street to identify, assess, and understand the money laundering and terrorist financing risks that State Street is exposed to, by categorizing its customers as High, Medium, or Low. <T1>

The higher the risk, the more due diligence is required to prevent and mitigate these risks. <T2>

A critical part of this process is to Know Your Customer (KYC). <T3>

Display T1 and the below image

Then display T2 and T3.

TranscriptNAInteractivitiesNACourse NavigationPrevious < 01 Next > 03


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Slide Name: Know Your Customer

Screen No: 03


State Street is committed to comply with Anti-Money Laundering (AML) and Sanctions regulations, as implemented by the State Street AML and Sanctions Programs. <T1>

KYC encompasses standards and procedures designed to ensure State Street knows with whom they are doing business. <T2>

Now that you have been introduced to the KYC process at State Street, we will review the components of KYC. <T3>


Display T1 and the below image

Then display T2 and T3.

Transcript

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NACourse Navigation

Previous < 02 Next > 04


Slide Name: Know Your Customer Components

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Screen No: 04


KYC is comprised of the following three components: <T1>

Customer Identification Program (CIP): This process is a risk-based approach designed to enable the First Line of Defense to form a reasonable belief that it knows the true identity of the customer. This process involves the collection and verification of a customer’s identification information before the customer is onboarded.

Customer Due Diligence (CDD): This process allows the First Line of Defense to assess the AML and Sanctions risk associated with the customer and obtain information sufficient to develop an understanding of normal and expected activity.

Enhanced Due Diligence (EDD): This process provides for a closer review of High-risk customers. Their activities are reviewed more closely at the time the account is opened and more frequently throughout the term of the relationship.


Display T1 with the below image.

Highlight each component in the above logo i.e. CIP, CDD and EDD in sync with the text.


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Slide Name: Consequences of Non-Compliance

Screen No: 05


State Street has no tolerance for breaches within its AML and Sanctions Programs. The consequences of breaches can be significant and may include:

For State Street employees: Monetary fines (in millions of dollars) Prison sentences (10 to 30 years)

For State Street: Monetary fines (in millions of dollars) Reputational damages (“It takes twenty years to build a reputation and

five minutes to destroy it.” (W.Buffet)) Cease and desist orders – (likely to weaken the solvency/earnings of the

financial institution) Blocked funds and seized goods


Display OST with image below. Change the text from COMPLIANCE to ‘NON-COMPLIANCE’

Image ID: 127266677

TranscriptNAInteractivitiesNACourse NavigationPrevious < 04 Next > 06Module Name: Know Your Customer at State Street

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Slide Name: First, Second, and Third Lines of Defense

Screen No: 06


To learn more about the roles and responsibilities of the First, Second, and Third Lines of Defense, click each tab below. <T1>


Display the instruction on the screen and the following tabs in a similar template below.

First line of Defense Second Line of Defense Third Line of Defense

On clicking each tab, display respective text.

Images for tabs:

First Line of Defense: 81556762

Second Line of Defense: 153275321

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Third Line of Defense: 209974957

Transcript

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Text for clickable:

First Line of Defense:

Business Units and KYC Shared Services form the First Line of Defense.

Responsibilities of the First Line of Defense are to: Ensure ongoing compliance is embedded into all relevant AML and Sanctions decisions and operations. Perform routine verification and provide AML Compliance with up to date information on AML and Sanctions key risks and control

indicators.

Second Line of Defense:

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AML Compliance forms the Second Line of Defense, supported where necessary by other control functions.

Responsibilities of the Second Line of Defense are to: Provide Real Time Monitoring focused on particularly risky areas of AML, such as looking to identify suspicious activity. Conduct Ex Post Surveillance over the effectiveness of compliance controls embedded in the First Line of Defense and AML

Compliance functions.

Third Line of Defense:

Corporate Audit forms the Third Line of Defense.

The responsibility of the Third Line of Defense is to conduct independent and regular reviews of State Street’s Global AML and Sanctions Programs, including the AML Compliance function itself.

When the user clicks next without clicking all the tabs, show the following pop-up:

“You must visit all information related to the First, Second, and Third Lines of Defense before proceeding.”

Display a check mark next to the tab that a user has accessed.

Course Navigation


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Slide Name: Customers at State Street

Screen No: 07


Do you know your customer? <T1>

A customer is a person contracting directly with State Street for the provision of products and services. To learn more about the customer types, click each icon below.


Display T1. Display T2 and the below image.

Image for Customer: 216328795

Display instruction with icons below: Non-Individuals and Individuals. On clicking each icon, display respective text in pop-ups.

Images for pop-ups:

Individuals: 85396339

Non-Individuals:153465980

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In addition to knowing your customer, additional parties affiliated with the customer need to be identified and verified.

To learn more about UBOs, Controlling Parties, and Associated Third Parties, click each icon below.


Display lead in first, then display instruction with the icons below.

On clicking each icon, display respective text in pop-ups.

Ultimate Beneficial Owners: 129063350

Controlling Parties: 111869576

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Associated Third Parties: 96970361

Transcript

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Create two icons as Individuals, Non-individuals.

Text for icons:

Non-Individuals

A Non-Individual is a lawful or legally standing organization (such as an association, corporation, partnership, proprietorship, or trust) existing independently and exercising powers independent of its members or beneficiaries – namely, the legal capacity to enter into agreements or contracts; assume obligations; incur and pay debts; sue and be sued; and accountability for illegal activities.

Individuals

An Individual is a natural person (human being), group, or an Indian Tribe, who has rights and duties prescribed by law.

When the user clicks next without clicking all the icons, show the following pop-up:

“You must visit all information related to customer types before proceeding.”

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Display a check mark next to the icon that a user has accessed.Create three icons as Ultimate Beneficial Owners (UBOs), Controlling Parties and Associated Third Parties.

Ultimate Beneficial Owners (UBOs)

Ultimate Beneficial Owners (UBOs) are Non-Individuals or Individuals who ultimately own or control a customer and/or the person on whose behalf a transaction is being conducted. UBOs may also called indirect owners, and include any person or entity that owns, has the right to vote, or has the power to sell or direct the sale of a class of the businesses voting securities of an immediate owner.

As complex ownership structures may be used to conceal the origin of funds and the identity of the customer’s UBO, the Business Unit should identify those Non-Individuals or Individuals who are the ultimate owner of the customer.

Controlling Parties

Controlling Parties are Non-Individuals or Individuals connected to an account with direct or indirect control over the account created. For KYC purposes, the Controlling Parties are defined as executive management (e.g. CEO, CFO, Directors) and Board of Directors.

Examples of Controlling Parties include, but are NOT limited to: Signers Investment Advisors Members of the Board of Directors General Partners

Associated Third Parties

Associated Third Parties are Non-Individuals or Individuals connected to an account who do not directly contract with State Street, are not controlling parties, and do not have a significant ownership stake in the funds within the account.

Associated Third Party relationships may involve outsourced products and services, use of independent consultants, services provided by affiliates and subsidiaries, joint ventures, or other business arrangements where the bank has an ongoing relationship.

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Examples of Associated Third Parties include, but are NOT limited to:

Beneficiaries of Pension Funds Trustees Intermediaries Traders Vendors Trading and Counterparties Nominal Owners Settlors Investment Advisors/Investment Managers/Introducers/Promoters (not considered customers)


“You must visit all information related to UBOs, Controlling Parties and Associated Third Parties before proceeding.”

Display a check mark next to the icon that a user has accessed.Course NavigationPrevious < 06 Next > 08

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Slide Name: Account

Screen No: 08


An account is a formal banking or brokerage relationship established to provide or engage in services, dealings, or other financial transactions. It includes a deposit account, a transaction or asset account, investment management account, credit account, or another extension of credit.

An account is a broad definition encompassing all products and services provided by State Street. <T1>

An account includes:

Safekeeping services Master custody services Master trust services Cash management services Accounting services Data processing, warehousing, and reporting services Performance, risk and compliance analytics services Investment management services and accounts Middle Office services Credit accounts, or another extensions of credit Deposit accounts Transaction or asset accounts <T2>

Display T1 with below image.

Image ID: 131840042

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Slide Name: Customer Types

Screen No: 09


A customer can be either a Non-Individual or an Individual. <T1>

State Street’s customer types include: <T2>

Bank Pension PlansCharities Personal Investment VehicleFoundations/Endowments Private CompanyGovernment Public CompanyHedge Fund & Private Equity Securities & Commodities (Broker/Dealer)Individual Special Purpose VehicleInsurance Company Sovereign Wealth Funds (SWF)Investment Advisor (Regulated) Supra National OrganizationInvestment Advisor (Unregulated) Trusts (Corp & Individual)Money Service Businesses (MSB) UniversitiesMutual Funds

State Street will not enter into a relationship with prohibited Non-Individuals or Individuals which includes:

Foreign Shell Banks Unregistered MSBs Numbered accounts or non-disclosed accounts Online gaming

Display T1.

Then display T2 followed by display of Table.

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To identify the customer type, the Business Unit uses the Customer Translation Table.


TranscriptNAInteractivitiesNACourse Navigation Previous < 08 Next > 10

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Slide Name: New and Existing Customers

Screen No: 10


In order to complete KYC, you first need to identify whether a customer is new or existing.

To learn more about New Customer and Existing Customer, click each icon below.


Display T1. Then display instruction with icons ‘New Customer’ and ‘Existing Customer’ below.

When user clicks the tab display respective text with image.

Image for New customer:

Image ID: 115175917

Image for Existing customer:

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Image ID: 153465980

TranscriptNAInteractivitiesText for tabs:

New Customer: A new customer is a Non-Individual or an Individual contracting with State Street for the first time.

Existing Customer:An existing customer is a Non-Individual or an Individual who currently holds a contract with State Street.


“You must visit all information related to New Customer and Existing Customer before proceeding.”

Display a check mark next to the tab that a user has accessed.Course Navigation Previous < 09 Next > 11

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Slide Name: Know Your Customer Key Terms

Screen No: 11


The following table defines some key terms that will be referenced throughout the KYC process.

Key Term DefinitionAccount Holder Non-Individual or Individual for which the account is

opened.

In most cases, the account holder would be the contracting party (i.e., customer), but in some instances the contract may be entered with State Street and the asset manager, asset servicer, trustee, or other agent on behalf of the account holder.

Account Related CDD Information collected during the CDD process related solely to account activity.

This includes: Expected account activity Identification of all nominal owners of the account The purpose for opening the account Whether the relationship will be used as a Payable

Through Account Whether the relationship will be used for Nested

AccountsSub-Account A sub-account (sometimes referred to as child accounts)

are often used to compartmentalize Master Accounts (sometimes referred to as parent accounts) allowing for

Display the OST in a progressive disclosure format

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more detailed recordkeeping and organization.

Many State Street Business Units utilize sub-accounts to support their internal or customer's operational purposes.

For example:

A foreign exchange customer with sub-accounts in different fiat currencies.

A multi-managed investment fund that has sub-accounts for each unique investment manager where the sub-accounts bear the same legal entity as the master account.

These sub-accounts have no AML obligations under the Global AML Policy; all AML responsibilities will be executed at the Master Account level.




Slide Name: Know Your Customer Lifecycle 27

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Screen No: 12


To learn more about the timelines associated with completing KYC that vary for new and existing customers, click each tab below.


Display the instruction on the screen and the following tabs in a similar template below.

New Customer New account Existing customer Same as Account

Holder Existing Customer different from Account Holder Existing Customer New Sub-Account Contracting, Booking and Servicing Jurisdictions

Image ID: 227814241

On clicking each tab, display respective text.

Timing for Existing Customers Opening New Accounts:

If within 30 calendar days of account opening, information required to

Display OST with below image.

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complete CIP, CDD, or EDD, is incomplete or pending, then a plan to remediate (signed by the Business Unit Management Committee member), shall be submitted to the Global Chief AML Officer and Corporate Chief Compliance Officer.

If after 60 calendar days of account opening, information required to complete the CDD or EDD process is incomplete or pending, then a plan to terminate the customer (including a termination date) will be submitted to the full State Street Management Committee for approval within seven days.

Display following instruction above the image.

To view the enlarged image, click the image below.

When the user clicks next without clicking the image, show the following pop-up:

“You must view the enlarged image of KYC Lifecycle Timeline before proceeding.”


Transcript

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NAInteractivitiesText for tabs:

Tab 1: New Customer:

For new customers and accounts, CIP, CDD, AML Customer Risk Rating (CRR), and EDD, if applicable, must be conducted prior to opening an account and rendering services.

In the event that the new customer and account holder are separate legal entities, CIP, CDD, AML CRR, and EDD, if applicable, must be conducted on the contracting and account holder before the account is opened and services are rendered.

Tab 2: New Account Existing Customer Same as Account Holder:

For existing customers who are establishing a new account with either the same or different division of State Street, where the contracting party is the same as the account holder, the existing customer’s CIP data must be verified before the account is opened and services are rendered.

CDD, AML CRR, and EDD, if applicable, must be completed within 30 calendar days of account opening.

The existing customer maintains its current risk rating until the risk rating for the new account is calculated. The new account risk rating is factored into the AML CRR upon completion.

Tab 3: Existing Customer Different from Account Holder:

For existing customers who are establishing a new account with either the same or different Business Unit of State Street, where the contracting party is different from the account holder, the existing customer’s CIP (contracting entity’s CIP) data must be verified before the account is opened or services are rendered.

Customer and account related CDD, AML CRR, and EDD, if applicable, must be performed within 30 calendar days of account opening.

The existing customer maintains its current risk rating until the new risk rating for the new account is calculated within the 30 day time frame.

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The new account risk rating is factored into the AML CRR on completion, though the account is a separate legal entity entering the organization through the original customer.

Before opening the account and rendering services, CIP, CDD, AML CRR, and EDD, if applicable, must be conducted at both the customer and account level.

Tab 4: Existing Customer New Sub-Account:

For existing customers opening a new sub-account, full KYC is only required when the master and sub-account are different legal entities and have different ultimate beneficial ownership. Additional guidance can be found in the AML and Sanctions Business Unit Standard Operating Procedures.

In instances where CDD is required for a sub-account, the existing customer’s CIP data must be verified before the sub-account is opened and services are rendered. CDD, EDD (if applicable), and AML CRR must be completed within 30 calendar days of account opening.

Tab 5: Contracting, Booking and Servicing Jurisdictions:

KYC must be performed based on the customer’s contracting jurisdiction. When a customer’s Servicing jurisdiction is different from the Contracting jurisdiction, the KYC requirements relative to the Servicing jurisdiction must also be selected and followed when performing KYC.

Also, when the booking location is different from the Contracting and Servicing location, the following countries’ nuances should also be included:

Australia Hong Kong Singapore

In the instance that a customer is contracting or being serviced in multiple locations, all of those jurisdictional nuances apply in addition to the Global Corporate Standard.


“You must visit all information related to timelines associated with completing KYC for new and existing customers before 31

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proceeding.”


Course Navigation Previous < 11 Next > 13

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Slide Name: Opening an Account

Screen No: 13


The relationship with the customer begins when the account is opened and services are rendered.

There are three types of relationships between State Street and its customers. Each type of relationship has a different event that signifies the account is opened and services are rendered.

These events CANNOT occur until KYC has been completed and approval has been granted to onboard the customer.

To learn more about State Street’s relationships with its customers, click each tab below.

Display OST then display instruction with smart art as shown.

Make the three tabs, Custody Relationship/Account, Bank Account and Services Rendered clickable.

On clicking each tab, display respective text in pop-ups.

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TranscriptText for Pop-ups:Custody Relationship/Account:

Overview:

When describing a custody relationship, Business Units refers to its customers as “Bundled” or “standalone.”

Standalone: Term used when a Business Unit is the primary owner of the custody relationship. Bundled: Term used when a Business Unit is not the primary owner of the custody relationship. In this case, the Business Unit is a

secondary provider of products or services to an existing custody relationship with a different Business Unit.

Definition:

No later than the day prior to the first transaction date on the account, it is now considered an open “live” account.

Example:

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Initial Securities Movement on June 30, 20XX; KYC should be complete no later than June 29, 20XX.

Therefore, in certain circumstances, an account can be opened and account numbers can be added to subscription documents in advance of a fund going live.

Bank Account:

Overview:

This is a traditional DDA account. This type of relationship is uncommon at State Street, due to our lack of retail banking operations, and comprises only a small percentage of our total relationships.

Definition:

Once an account is ready to transact or is capable of receiving a deposit, it is considered an open “live” account.

Example:

Once an account is open on the Hogan deposit system, it is considered an open “live” account.

Services Rendered:

Overview:

These are “service” oriented activities provided to the customer.

Definition:

The earlier of:

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1) The date the contract has been signed, or

2) After the first service has been provided to the customer.

Examples:

When the first State Street generated report from the customer’s account is delivered to the customer. When servicing commences, generally by way of a signed agreement noting that services should not be performed until the

agreement is signed.


“You must visit all information related to types of established relationships before proceeding.”

Display a check mark next to the icon that a user has accessed.InteractivitiesNACourse NavigationPrevious < 12 Next > 14

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Slide Name: Knowledge Check

Screen No: 14


What are the components of KYC that need to be executed for a High-risk customer?

A. CIPB. CDDC. EDDD. All of the above

Select the correct option, and then click Submit.

Correct Answer: D

No of attempts: 1

Correct Feedback: That’s right! CIP, CDD, and EDD need to be executed for a High-risk customer.

Incorrect Feedback: That’s incorrect. CIP, CDD, and EDD need to be executed for a High-risk customer.

TranscriptNAInteractivitiesNACourse NavigationPrevious < 13 Next > 15Module Name: Know Your Customer at State Street

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Slide Name: Overview of the Anti-Money Laundering Toolkit

Screen No: 15


The AML KYC Toolkit sets the foundation of the AML Program.

Global AML and Sanctions Policies Global AML and Sanctions Business Unit Standard Operating Procedures Customer Translation Table KYC Requirements Matrix KYC Platform AML Customer Risk Rating (CRR) Risk Forms (EDD Customer Profile and the Low/Medium and High Periodic

Review forms)

To learn more about AML KYC Toolkit components, click each tab below.


Display a toolkit icon on the left with tabs on right: Global AML and Sanctions Policies Global AML and Sanctions Business Unit

Standard Operating Procedures Customer Translation Table KYC Requirements Matrix KYC Platform AML Customer Risk Rating (CRR) Risk Forms (EDD Customer Profile and the

Low/Medium and High Periodic Review forms)

On clicking each tab, display respective text and images in a pop-up.

On closing the pop-up, direct the user to the main

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screen.

Images for pop-ups:

Tab 1:

Tab 2:

Tab 3:

Tab 4:

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Tab 5:

Tab 6: Use a funnel concept to depict the customer rating similar to the one used in the Introduction animation.

Tab 7:

When presenting text in the pop-up, use left side to present text and right side to show the image.

Transcript

NAInteractivities

Display the following tabs on this screen:40

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Global AML and Sanctions Policies Global AML and Sanctions Business Unit Standard Operating Procedures Customer Translation Table KYC Requirements Matrix KYC Platform AML CRR Risk Forms (EDD Customer Profile and the Low/Medium and High Periodic Review forms)

Text for pop-ups:

Tab 1: Global AML and Sanctions Policies

The Global Policies establish comprehensive governing policies, principles and standards to protect State Street, and its employees, shareholders, and customers from exposure to AML and Sanctions risks.

Tab 2: Global AML and Sanctions Business Unit Standard Operating Procedures

The Global AML and Sanctions Standard Operating Procedures is designed to assist the First Line of Defense in meeting regulatory expectations as well as State Street’s expectations on processes, activities, and controls defined as part of the AML and Sanctions’ control environment.

Tab 3: Customer Translation Table

The First Line of Defense must identify, validate, and verify each customer that opens an account, so the Business Unit knows the true identity of their customer.

The Customer Translation Table helps the Business Unit identify the applicable customer type.

Tab 4: KYC Requirements Matrix

The KYC Requirements Matrix outlines the Policy requirements for KYC at State Street. It includes a description of each requirement

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including data and evidence that must be acquired, verified and recorded.

Tab 5: KYC Platform

The KYC Technology Platform is a tool created to: Facilitate communication and workflow between Business Units and KYC Shared Services. Provide a facility for uploading and storing documents. Create a record of compliance with KYC Procedures.

The KYC Technology Platform supports all components of KYC as well as risk rating calculations for entities and investors, where State Street has a regulatory obligation.

KYC Platform functionality allows a user to: Establish a Legal Entity. Manage KYC tasks and workflow. Upload documents to the customer’s file for evidence, including the AML risk rating and screening results. Have one enterprise-wide record and repository to ensure compliance with AML and Sanctions regulations.

Tab 6: AML Customer Risk Rating (CRR)

State Street’s policy requires the First Line of Defense to assess each customer’s money laundering risk prior to acceptance of the customer.

A customer relationship includes accounts, products, services, and regulatory and geographic risks that vary across accounts; so each is addressed separately when conducting the risk rating.

An overall rating is assigned based on the evaluation of the customer’s characteristics.

Tab 7: Risk Forms (EDD Customer Profile and the Low/Medium and High Periodic Review forms)

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The AML EDD Customer Profile Form and the Periodic (Low/Medium or High) Review Forms are designed to provide the First Line of Defense uniform documents for use when executing either KYC or periodic review activities.


“You must visit all information related to AML KYC Toolkit components before proceeding.”

Display a check mark next to the tab that a user has accessed.Course NavigationPrevious < 14 Next > 16

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Slide Name: Global Anti-Money Laundering Policy

Screen No: 16


The purpose of the Global AML Policy is to provide an overall framework for establishing State Street’s AML program.

The policy is designed to protect State Street and its employees, on a global basis, from involvement in money laundering, including terrorist financing, tax evasion, and other criminal activities. (T1)


Display T1 and the below image.

Image Id:196902599In the above image, change the text to “Global AML Policy”

Transcript

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NACourse Navigation


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Slide Name: Purpose of Global Anti-Money Laundering Policy

Screen No: 17


The Global AML Policy:

Promotes employee awareness to detect, deter, and report AML risks. Promotes strong governance and risk management throughout State Street

to properly manage and mitigate AML risks. Provides State Street-wide guidance on AML compliance standards and

expectations that must be implemented globally. Considers additional jurisdictional requirements. Mandates full cooperation with regulatory authorities and law enforcement

authorities in civil and criminal investigations, prosecutions, and forfeiture actions related to AML.


Display the bulleted list in the template above.

Transcript

NAInteractivities

NACourse Navigation


Module Name: Know Your Customer at State Street45

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Slide Name: Global Sanctions Policy

Screen No: 18


The purpose of the Global Sanctions Policy is to: (T1)

Meet country-specific laws, regulations, rulings, examination standards, supporting guidance and internal standards, and guidelines.

Mitigate potential compliance, regulatory, and reputational risks associated with violations of Sanctions laws and regulations.

Mitigate risks of conducting business with sanctioned parties.

Display T1 and the image below.

Image ID: 196902599

In the above image, replace the word “Policies” with “Global Sanctions Policy”

State Street’s First Line of Defense must: (T2)

Block accounts and other property of sanctioned entities and Individuals, where required/instructed by local authorities.

Prohibit or reject unlicensed trade and financial transactions with sanctioned countries, entities, and Individuals.


Then display T2 and the image below.

Image ID: 116609278

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NAInteractivities

NACourse Navigation Previous < 17 Next > 19

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Slide Name: Purpose of Global Sanctions Policy

Screen No: 19


The Global Sanctions policy:

Promotes employee awareness to detect, deter, and report Sanctioned parties or Sanctions related activities internally and to government authorities (when required) through identified channels of escalation.

Promotes strong governance and risk management throughout State Street. Manages and mitigates Sanctions compliance risks. Provides State Street-wide guidance and approach on minimum Sanctions compliance

standards and expectations to be implemented; adding standards at country level that meet local regulations.

Mandates full cooperation with regulatory and law enforcement authorities in civil and criminal investigations, prosecutions, and forfeitures relating to Sanctions evasion.


Display the bulleted list in the template above.

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Screen No: 20


Select an option that enables Business Units to identify a customer type.

A. Customer Translation TableB. AML and Sanctions PoliciesC. Risk Forms (EDD Customer Profile and the Low/Medium and

High Periodic Review forms)D. Global AML and Sanctions Business Unit Standard Operating

Procedures


Correct Answer: A

No of attempts: 1

Correct Feedback: That’s right! The Customer Translation Table enables Business Units to identify a customer type.

Incorrect Feedback: That’s incorrect. The Customer Translation Table enables Business Units to identify a customer type.


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Slide Name: Global Anti-Money Laundering and Sanctions Business Unit Operating Procedures

Screen No: 21


The Global AML and Sanctions Business Unit Operating Procedures provide State Street’s First Line of Defense with uniform and detailed guidance to prevent employee involvement in money laundering, fraudulent activities, and financing of terrorist activities.


Display the image of an officer in a cabin and the text will appear as a callout/speech bubble as shown below:

Text for call out: The Global AML and Sanctions Business Unit Operating Procedures provides State Street’s First Line of Defense with uniform and detailed guidance to prevent employees from involvement in money laundering, fraudulent activity, and the financing of terrorist activities.

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Module Name: Know Your Customer at State Street50

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Slide Name: Purpose of Global Anti-Money Laundering and Sanctions Business Unit Operating Procedures

Screen No: 22


The Global AML and Sanctions Business Unit Operating Procedures ensure that standard and uniform procedures are followed globally across State Street.

State Street’s First Line of Defense must:

Ensure that it knows its customer. Ensure adequate corporate governance and risk management practices are in place

to properly manage and mitigate AML and Sanctions operational, reputational, and strategic risks.

Determine the true identity of all customers with whom State Street maintains accounts and/or relationships and conduct risk-based, appropriate due diligence on customers, their UBOs and related parties.

Ensure adequate documentation of customer information in accordance with Policy requirements for regulatory compliance.

Understand and assess AML and Sanctions risks inherent in establishing relationships with its customers.

Understand State Street’s role in monitoring customer transactions. Determine the AML CRR. Understand how to apply due diligence for new and existing customers and when to

apply EDD for those customers who are deemed high-risk. Comply with Sanctions regulations. Understand and identify what may constitute suspicious activity and what may be an

acceptable variance of customer business activity. Know when to escalate and how to report suspicious activity. Respond to and initiate information sharing requests.

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Cooperate fully with regulatory and law enforcement authorities in criminal investigations, prosecutions, and forfeitures.

Maintain proper records.



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EDD Customer

ProfilePeriodic Review Forms

State Street



Slide Name: Risk Forms

Screen No: 23

On-Screen Text Graphics DescriptionThe two types of risk forms (EDD Customer Profile and the Low/Medium and High Periodic Review forms) have been designed to support consistency in the KYC process.

These forms facilitate data gathering, expeditious decision making, and ensure compliance with State Street’s policies. T1

To learn more about the EDD Customer Profile and Periodic Review Forms, click each icon below.


Display T1 and the instruction following it on the screen.

Then display the icons on the screen.

EDD Customer Profile Image ID: 139155077

Periodic Review Forms Image ID: 212582002

On clicking each icon, display respective text in a pop-up.

On closing the pop-up, direct the user to the main screen.

Images for pop-ups:

EDD Customer Profile: 110232998

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Periodic Review Forms:

TranscriptNAInteractivitiesDisplay the following icons:

EDD Customer Profile Periodic Review Forms

Text for pop-ups:

EDD Customer Profile

After completing CDD and determining that AML CRR is High, KYC Shared Services, supported by the Business Unit must perform EDD and complete the AML EDD Customer Profile form.

KYC Shared Services must submit the form to AML Compliance for further review. AML Compliance determines if any additional unique mitigating controls must be put in place before onboarding the customer.

Periodic Review Forms

In accordance with State Street’s Global AML Policy, the First Line of Defense conducts periodic risk-based reviews on all customers/accounts to ensure KYC information is accurate and the customer’s AML risk rating is appropriate.

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The frequency of periodic reviews is as follows:

High (H): Every year; the first review should be scheduled six months from the date in which the entity’s status in the KYC Platform reflects “verified,” (the status for “approved for account opening.”)

Medium (M): Every two years Low (L): Every three years


“You must visit all information related to risk forms before proceeding.”

Display a check mark next to the icon that a user has accessed.

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Screen No: 24

On-Screen Text Graphics DescriptionIdentify the frequency of periodic reviews for High-Risk customers.

A. Every year; the first review should be scheduled after three months from the date in which the entity’s status in the KYC Platform reflects “verified.”

B. Every two years; the first review should be scheduled after six months from the date in which the entity’s status in the KYC Platform reflects “verified.”

C. Every year; the first review should be scheduled six months from the date in which the entity’s status in the KYC Platform reflects “verified.”

D. Every five years; the first review should be scheduled after six months from the date in which the entity’s status in the KYC Platform reflects “verified.”


Correct Answer: C

No of attempts: 1

Correct Feedback: That’s right! Periodic reviews for High-Risk customers are conducted every year; the first review should be scheduled six months from the date in which the entity’s status in the KYC Platform reflects “verified.”

Incorrect Feedback: That’s incorrect. Periodic reviews for High-Risk customers are conducted every year; the first review should be scheduled six months from the date in which the entity’s status in the KYC Platform reflects “verified.”


State Street



Slide Name: Module Summary

Screen No: 25


Important points covered in this module:

KYC encompasses standards and procedures designed to ensure State Street knows with whom they are doing business.

KYC is comprised of the following three components: CIP, CDD, and EDD. A customer is a person contracting directly with State Street for the provision of

products and services. An account is a formal banking or brokerage relationship established to provide or

engage in services, dealings, or other financial transactions. A customer can be either a Non-Individual or an Individual. The timelines associated with completing KYC vary for new and existing

customers. The AML Toolkit contains: Global AML & Sanctions Policies, Global AML and

Sanctions Business Unit Standard Operating Procedures, Customer Translation Table, KYC Requirements Matrix, KYC Platform, AML Customer Risk Rating (CRR), and Risk Forms (EDD Customer Profile and the Low/Medium and High Periodic Review forms).

The risk forms (EDD Customer Profile and the Low/Medium and High Periodic Review forms) facilitate data gathering, expeditious decision making, and ensure compliance with State Street’s policies.

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Image ID: 55852261

TranscriptNA

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Interactivities NACourse Navigation


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Slide Name:

Screen No: 26


The next module in the KYC series focuses on CIP. CIP is the first component of the KYC program and it covers obtaining identification information and verifying the identity of customers before onboarding them.

To get familiar with CIP, please proceed to Module 2: Customer Identification Program.

Display KYC logo with the text.

Highlight CIP in the above logo.

TranscriptNAInteractivities NACourse Navigation

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