The Securities and Exchange Board of India (“SEBI”) on 4th July, 2018 has issued a Master Circular laying down Guidelines on Anti-Money Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002 and Rules (“Guidelines”). The said Guidelines will be applicable to all intermediaries registered under Section 12 of the Securities and Exchange Board of India Act, 1992.
Background:
The Prevention of Money Laundering Act, 2002 (“PMLA”) requires all Banking Companies, Financial Institutions and Intermediaries to adhere to client account opening procedures and maintain records of such transactions. The Guidelines are pursuant to the recommendations made by Financial Action Task Force (“FATF”) on anti-money laundering standards.
The Master Circular lay down guidelines related to the following:
- Policies and Procedures to Combat Money Laundering and Terrorist financing
- Client Due Diligence Procedures (CDD)
- Record Keeping
- Retention of Records
- Procedure for freezing of funds, financial assets or economic resources or related services
- Reporting to Financial Intelligence Unit-India
The list of key circulars/ directives issued regarding Know Your Customer (“KYC”), Customer Due Diligence (“CDD”), Anti Money Laundering (“AML”) and Combating the Financing of Terrorism (“CFT”) has also been enumerated in the Schedule -I annexed with the Guidelines.
The present Master Circular shall supersede the earlier Master Circular on AML/ CFT dated December 31, 2010.
Source: Securities and Exchange Board of India
