Financial Crime World

SEBI Issues New Guidelines to Bolster India’s Anti-Money Laundering Regime in Securities Market

The Securities and Exchange Board of India (SEBI) has announced amended guidelines to enhance India’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulatory framework for securities market intermediaries. These changes fall under the Prevention of Money Laundering Act, 2002, and its corresponding rules.

Objective of the Amended Guidelines

The Securities and Exchange Board of India (SEBI) introduced these modifications to strengthen the regulatory framework against money laundering and financial terrorism within the securities market. The key goals of the new guidelines are:

  • Increase transparency
  • Promote effective implementation of AML and CFT regulations for securities market intermediaries

Expanded Scope

The new guidelines expand the coverage of securities market intermediaries subjected to protective regulations, thereby broadening the scope to include a wider range of market participants.

Improved Know Your Customer (KYC) Measures

The amended AML/CFT guidelines mandate more robust KYC procedures for customers. These measures aim to:

  • Ensure adequate client information
  • Prevent money laundering and terrorist financing activities

Enhanced Reporting Obligations

The new rules require securities market intermediaries to report:

  • Suspected money laundering or terrorist financing activities
  • Unusual transactions or patterns that may indicate money laundering or terrorist financing

Increased Penalties

The updated guidelines emphasize significant penalties for non-compliant intermediaries, deterring potential malfeasance and discouraging potential violations.

Transparency and Reporting

As part of the efforts to create transparency and make information more readily available, SEBI suggests that intermediaries publish an annual compliance report on their website about their AML/CFT efforts. This will help investors and regulators better understand how securities market intermediaries in India are working to prevent money laundering and terrorist financing within their businesses.

SEBI’s Commitment to a Thriving and Robust Securities Market

By updating their AML and CFT guidelines, the Securities and Exchange Board of India further establishes its dedication to protecting investors’ interests and fostering a fair, transparent, and efficient securities market in India.