Anti-Money-Laundering program
Know the member. Know the counterparty.
- Regulator
- FinCEN · IRS SB/SE
- Program
- 31 CFR 1022 MSB
- Reviewed
- Annually · external
- Owner
- Chief Compliance Officer
Program pillars
Five pillars. One risk register.
- 01
Designated AML officer
A dedicated Chief Compliance Officer with BSA-program responsibility, reporting independently to the Audit Committee. Authority to block onboarding, file SARs, and freeze member accounts pending review. - 02
Internal controls
Documented policies, procedures, and system controls covering CIP, sanctions screening, PEP screening, transaction monitoring, and reporting. Policies are versioned and material changes are filed with the Board. - 03
Annual training
Role-based AML training for every employee and contractor, refreshed annually and on policy change. Specialised onboarding-team and compliance-team tracks. Completion is tracked and audited. - 04
Independent review
Annual independent review by an external firm testing program effectiveness, sample transaction monitoring, SAR decision files, and CIP records. Findings reported to the Audit Committee. - 05
Enhanced due diligence
Risk-rated CDD at onboarding; EDD for high-risk members, politically exposed persons, nested relationships, and high-volume counterparties. Ongoing refresh on trigger events. - 06
Beneficial ownership
FinCEN Beneficial Ownership Information (31 CFR 1010.230) collected and verified at onboarding for every legal-entity member. Refreshed on change of control and at least every 24 months.
Customer Identification Program
Every member is verified before trading.
CIP tiers · member entities
- Tier 1 — Standard
- Legal name, formation jurisdiction, registered address, EIN/TIN or foreign equivalent, certificate of good standing, authorised officers list.
Applies to all non-high-risk legal-entity members.
- Tier 2 — Enhanced
- Tier 1 plus beneficial owners at 25%, documented ownership chain, source-of-funds narrative, sanctions attestation, last two years audited financials.
Applies to nested relationships, cross-border members, or entities rated high-risk by the onboarding model.
- Tier 3 — Strict
- Tier 2 plus on-site diligence (or video equivalent), enhanced officer background checks, pre-funded margin account, quarterly CDD refresh.
Applies to PEP-linked members, members in FATF high-risk jurisdictions, or on CCO escalation.
- Natural-person signatories
- Government-issued photo ID, proof of address (<90 days old), PEP/sanctions screening, liveness check on authorised signatories.
Every authorised human representative on a member account.
Beneficial ownership
FinCEN BOI on every entity member.
Under the Corporate Transparency Act, as implemented by 31 CFR 1010.380, Wavestar collects Beneficial Ownership Information for every legal-entity member — identifying natural persons who ultimately own or control the member at the 25-percent threshold (ownership prong) or exercise substantial control (control prong). BOI records are stored separately from operational systems, access- controlled to the compliance team, and refreshed on every change of control and at least every 24 months.
BOI record fields
- Natural person
- Full legal name
- Date of birth
- Collected; retained 5 years past relationship end
- Residential address
- Current; re-validated on refresh cycle
- Identifying document
- Passport, state ID, or tribal ID; image retained
- Ownership percentage
- Certified by entity officer; reconciled against cap table
- Control prong
- Role, title, basis for substantial control determination
Screening
Sanctions and PEP screening at every gate.
- 01
Lists screened
OFAC SDN, OFAC Consolidated Sanctions List, OFAC Sectoral Sanctions, UN Security Council consolidated list, EU consolidated list, UK OFSI consolidated list, Canadian OSFI, Australian DFAT, and Dow Jones Risk & Compliance PEP and adverse-media. - 02
Screening cadence
On onboarding (Tier 1), on every CDD refresh, on every sanctions-list publication, and on every trade before match. Re-run within 24 hours of any affiliate change. - 03
Match handling
Potential matches are quarantined from onboarding or trading flow and escalated to the compliance analyst queue. False positives are documented; true hits are escalated to the CCO and reported where required. - 04
PEP handling
Politically Exposed Persons, their immediate family members, and known close associates are automatically escalated to Tier 3 EDD. Senior-management approval is required for PEP-linked onboarding.
Ongoing monitoring
Transaction monitoring and SAR filing.
Cleared trades, member deposits, member withdrawals, and registry activity are monitored in real time against a library of behavioural rules and a supervised anomaly-detection model. Triggered alerts are routed to the compliance analyst queue with a target initial review inside two business hours. Suspicious activity reports are filed with FinCEN through the BSA E-Filing System within 30 calendar days of detection, extended to 60 days where the subject is not yet identified.
Onboarding enquiry
Prepare to onboard as a clearing member.
The onboarding team will walk you through the CIP and CDD requirements for your entity type, jurisdiction, and membership tier. Typical onboarding for a Tier 1 member is ten business days from complete submission.