NOTICE
CSE/Notices/SEBI/2012/N6
May 18, 2012
Re: Anti Money Laundering (AML) Standards/Combating Financing of Terrorism
(CFT)/Obligations of Securities Market Intermediaries under Prevention of Money
Laundering Act, 2002 and Rules framed there-under- Master Circular on AML/CFT
Members of
the Exchange are hereby informed that the Exchange has received a Circular from
SEBI vide Ref. No ISD/AML/CIR-1/2008, dated December 19, 2008 regarding the above
mentioned subjects. The contents of the said Circular are reproduced hereunder
for information and necessary action of the Members.
Quote: -
ISD/AML/CIR-1/2008
December 19, 2008
To all Intermediaries registered with SEBI under
section 12 of the SEBI Act.
(Through the stock exchanges for
stock brokers, sub brokers and depositories for depository participants)
Sub: Anti Money Laundering (AML) Standards/Combating
Financing of Terrorism (CFT)/Obligations of Securities Market Intermediaries
under Prevention of Money Laundering Act, 2002 and Rules framed there-under-
Master Circular on AML/CFT
Dear Sir / Madam,
- The Prevention of Money Laundering Act, 2002 (PMLA)
was brought into force with effect from 1st July 2005. Necessary
Notifications / Rules under the said Act were published in the Gazette of
India on July 01, 2005. Subsequently, SEBI issued necessary
guidelines vide circular no. ISD/CIR/RR/AML/1/06 datedJanuary 18, 2006 to all securities market
intermediaries as registered under Section 12 of the SEBI Act, 1992. These
guidelines were issued in the context of the recommendations made by the
Financial Action Task Force (FATF) on anti-money laundering
standards. Compliance with these standards by all
intermediaries and the
country has become imperative for
international financial relations.
- As per the provisions of the Prevention of Money
Laundering Act, every banking company, financial institution (which
includes chit fund company, a co-operative bank, a housing finance
institution and a non-banking financial company) and
intermediary (which includes a stock-broker, sub-broker, share transfer
agent, banker to an issue, trustee to a trust deed, registrar to an issue,
merchant banker, underwriter, portfolio manager, investment adviser and
any other intermediary associated with securities market and registered
under section 12 of the Securities and Exchange Board of India Act, 1992)
shall have to maintain a record of all the transactions; the nature and
value of which has been prescribed in the Rules notified under
the PMLA. Such transactions include :
Ø All cash transactions
of the value of more than Rs 10 lakhs or its equivalent in foreign
currency.
Ø All series of cash
transactions integrally connected to each other which have been valued below Rs
10 lakhs or its equivalent in foreign currency where such series of
transactions take place within one calendar month.
Ø All suspicious
transactions whether or not made in cash.
- The Guidelines laid down the minimum requirements and
it was emphasised that the intermediaries may, according to their
requirements, specify additional disclosures to be made by clients to
address concerns of Money Laundering and suspicious transactions
undertaken by clients. All intermediaries were also advised to ensure that
a proper policy framework as per the Guidelines on anti-money laundering
measures is put into place and to designate an officer as ‘Principal
Officer’ who would be responsible for ensuring compliance of the
provisions of the PMLA. Names, designation and addresses (including e-mail
addresses) of ‘Principal Officer’ shall also be intimated to the Office of
the Director-FIU, 6th Floor,
Hotel Samrat, Chanakyapuri, New
Delhi -110021, Indiaon an immediate basis.
- The detailed procedure incorporating the manner of
maintaining information and matters incidental thereto for SEBI registered
intermediaries, under the prevention of Money Laundering Act, 2002 and the
Rules made there-under and formats for reporting by the intermediaries
were also issued subsequently vide circular reference no.
ISD/CIR/RR/AML/2/06 dated March 20, 2006.
5. This Master circular
consolidates all the requirements/obligations issued with regard to AML/CFT
till December 15, 2008. This Circular is being issued to all the
intermediaries as specified at para 2 above. The circular shall also
apply to their branches and subsidiaries located abroad, especially, in
countries which do not or insufficiently apply the FATF Recommendations, to the
extent local laws and regulations permit. When local applicable laws and
regulations prohibit implementation of these requirements, the same should be
brought to the notice of SEBI. In case there is a variance in KYC/AML standards
prescribed by SEBI and the regulators of the host country, branches/overseas
subsidiaries of intermediaries are required to adopt the more stringent
requirements of the two.
- This Master circular is being issued in exercise of
powers conferred under Section 11 (1) of the Securities and Exchange Board
of India Act, 1992, and Rule 7 of Prevention of
Money-laundering (Maintenance of Records of the Nature and Value of
Transactions, the Procedure and Manner of Maintaining and Time for
Furnishing Information and Verification and Maintenance of Records of the Identity
of the Clients of the Banking Companies, Financial Institutions and
Intermediaries) Rules, 2005 to protect the interests of investors in
securities and to promote the development of, and to regulate the
securities market.
- All the registered intermediaries are directed to
ensure compliance with the requirements contained in this Master Circular
on an immediate basis. Stock exchanges and depositories are also directed
to bring the contents of this circular to the attention of their member
brokers/ depository participants and verify compliance during inspections.
Yours faithfully,
S. Ramann
Unquote:
Members
are requested to take note of the aforesaid guidelines/circulars of SEBI and
act accordingly.
M.A.V.
Raju
Deputy
General Manager