Financial Crime World

Title: SEBI’s New Guidelines on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) for Securities Market Intermediaries in India

Introduction

India’s Securities and Exchange Board (SEBI) has issued new guidelines on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) for securities market intermediaries in India. The new guidelines aim to protect the securities market from being used for money laundering and terrorist financing activities by implementing a detailed framework for AML and CFT policies.

SEBI Guidelines for AML and CFT

The following outlines the key requirements of the new SEBI guidelines:

  1. Protection against Financial Crimes

    • Intermediaries are required to implement AML and CFT policies to safeguard the securities market.
    • The guidelines are in line with the Prevention of Money Laundering Act, 2002, and the rules framed thereunder.

  2. Customer Due Diligence (KYC)

    • Intermediaries must conduct thorough due diligence while onboarding customers.
    • It is essential to maintain updated records of customers, including necessary identification information.

  3. Risk-Based Monitoring System

    • Intermediaries need to establish a risk-based monitoring system to identify and report any suspicious transactions.
    • Such reports must be filed with the relevant authorities promptly.

  4. Record Maintenance

    • Intermediaries must maintain records of all transactions and keep them available for inspection by the authorities for a period of five years.

Compliance and Penalties

  • Familiarization with Guidelines: It is the responsibility of all securities market intermediaries to familiarize themselves with these new guidelines and ensure full compliance with them.
  • Penal Action: Failure to adhere to these guidelines may result in penal action by the authorities.

Resources

The detailed guidelines are available on the SEBI website for reference. Intermediaries should prioritize understanding and implementing these new guidelines to ensure continued compliance with regulatory requirements.