Anti-money laundering: Sebi releases fresh set of guidelines

Source: The post is based on the article “Anti-money laundering: Sebi releases fresh set of guidelines” published in “Livemint” on 17th October 2023

What is the News?

The Securities Exchange Board of India (SEBI) has released a set of amendments to strengthen anti-money laundering(AML) standards and combat finance terrorism(CFT).

These guidelines are based on rules established under the Prevention of Money Laundering Act of 2002.

What are the key amendments introduced by SEBI to strengthen anti-money laundering (AML)?

Measures needed: If a host country doesn’t follow the same rules as the home country when it comes to preventing money laundering and financing terrorism, financial groups need to take extra steps to manage these risks.

Financial groups must set up company-wide programs to combat money laundering.These rules apply to all branches and subsidiaries mostly owned by the financial group.

The programs include: 

– Creating policies and procedures to share information needed to stop money laundering and terrorist funding.

– Providing customer account and transaction information from branches and subsidiaries when necessary for anti-money laundering and counter-terrorism purposes.This includes analyzing transactions that seem unusual.

Disclosing status: In case of a trust, the reporting entity will ensure that trustees disclose their status at the time of commencement of an account-based relationship.

Beneficial Ownership: In case the client is a partnership firm, the beneficial owner would be the one who has ownership of more than 10% of capital or profits of the partnership or who exercises control through other means.Earlier, the requirement was 15%.