Pakistan’s Securities and Exchange Commission Introduces Amendments to Combat Financial Crime

The Securities and Exchange Commission of Pakistan (SECP) has announced amendments to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Regulations 2020. These changes aim to strengthen its regulatory framework, effectively combating financial crimes, controlling money laundering, and combatting terror financing.

Background

The move comes in response to the National Risk Assessment 2023, which conducted a self-assessment of SECP’s regulatory framework against international standards.

Key Changes

The amendments, the outcome of stakeholder consultations, demonstrate SECP’s commitment to enhancing Pakistan’s regulatory framework and aligning it with global best practices. The revised regulations focus on expanding the scope to include measures tailored for Customer Due Diligence (CDD) requirements related to bank account opening of mentally disordered persons.

• Classifying an account as dormant after three years of inactivity, down from five years previously
• Outlining guidelines for relying on third parties for CDD
• Specific requirements applicable to foreign branches of regulated entities and their subsidiaries

Impact

The SECP’s move is expected to enhance the country’s financial system integrity while ensuring compliance with international standards. The amendments are seen as a significant step forward in Pakistan’s efforts to combat financial crime and strengthen its regulatory framework.

By implementing these changes, the SECP aims to prevent and detect financial crimes more effectively, ultimately contributing to a more stable and secure financial system for Pakistan.