At HIFI, compliance and transparency are at the core of our Multi-Currency Account (MCA) offering. We adhere to strict regulatory standards to ensure full traceability of the flow of funds through an MCA.

This document outlines the compliance policies governing MCA usage, with a specific focus on financial institutions (FIs), third-party payment processors (TPPPs), and multi-layered financial relationships.

📘

Note for Non-Financial Institution Clients:

This compliance guide primarily applies to financial institutions (FIs) and third-party payment processors (TPPPs) using Multi-Currency Accounts (MCAs). If your business is not an FI or TPPP, most of these restrictions will not apply to you. However, all MCA users must still ensure clear and verifiable fund flows, following the outlined compliance principles.

1. Core Compliance Principle: Clear Source & Destination of Funds

To ensure compliance, every transaction within an MCA must meet the following requirements:

✅ The origin of incoming funds must be clear and verifiable, including who is funding the account, where the money comes from, and the purpose of the transaction.
✅ The final recipient of outgoing funds must be clearly identifiable, including who ultimately receives the transferred funds and the purpose of the transaction.
✅ No obscured or nested financial relationships within the flow of funds through an MCA.

These requirements applies to all transactions, ensuring we can effectively prevent fraud, money laundering, and financial misconduct.

2. Restriction on Multi-Layered Financial Relationships

2.1 No Multi-Layered Financial Institutions

🚫 MCAs do not support multi-layered financial institution relationships.

• Each MCA is issued directly to a single financial institution (FI).
• That FI may only use the MCA to serve small and medium-sized enterprises (SMEs) or corporate businesses as its underlying clients.
• The FI cannot use an MCA to facilitate transactions for another FI or act as a passthrough entity for another financial institution.

💡 Why does this restriction exist?

Allowing financial institutions to interact with each other creates opaque fund flows, making it difficult to track the true source and final destination of funds. This restriction ensures full visibility into all transactions and prevents illicit financial activities.

2.2 No Sending or Receiving Funds from Another FI

🚫 An FI holding an MCA is not allowed to send funds to another FI.
🚫 An MCA cannot accept funds from an FI.

• If an FI were to use an MCA to transfer funds to another FI, the final recipient would be untraceable, violating compliance standards.
• Accepting incoming funds from an FI means that the true source of funds cannot be verified.

✅ Allowed: MCAs may be used by financial institutions, but they may only facilitate payments for SMEs and corporate businesses, not for other financial institutions.

3. Examples of Approved Transaction Flows

Here are straightforward, compliant transaction flows that align with MCA policies:

✅ Example 1: Paying a Supplier

• Company A is purchasing goods from a supplier.
• They use their MCA to pay the supplier directly.
• ✅ Clear source (Company A) and clear destination (supplier).

✅ Example 2: Freight & Logistics Companies

• Freight Company A collects funds from its customers for shipping services.
• It uses its MCA to pay its subcontractor, Freight Company B, for delivery services.
• ✅ Funds start from known customers and end at a known service provider.

These type of transactions are allowed because there is a clear business purpose, and the source and destination of funds are fully traceable.

🚫 What’s NOT Allowed?

• FI A sends funds to FI B → ❌ We lose visibility on the final recipient.
• FI A receives funds from another FI → ❌ We don’t know the true origin of the funds.

The transaction flows include, but are not limited to, the examples mentioned above, as long as the compliance guidelines are followed. If you have any questions about whether your intended use of an MCA or your transaction flow is supported, please feel free to reach out at [email protected] if you are a prospective customer, or through the Slack channel if you are an existing customer.