press trust of india
NEW DELHI, 16 JUNE: Market regulator the Securities and Exchange Board of India is finalising new AML (anti-money laundering) guidelines covering entities such as brokers and mutual funds to put in place stronger checks against possible cleansing of funds through capital markets.
The guidelines, expected to be ready within a few weeks, will replace Sebi’s existing AML/CFT (Combating the Financing of Terrorism) standards, which first came into effect about 10 years ago and saw the last major amendments in late 2010, a senior official said.
While the Sebi is of the view that a strong defence mechanism already exists in the Indian capital market regulatory system against any possible money laundering or terror financing activities, a review has become necessary to consolidate the various initiatives undertaken by it and the government over the years on this front, he added.
Besides, certain changes and additional safeguards might be necessary to tackle the new challenges thrown forward by the technological and market advances and to harmonise the guidelines with new standards set by global bodies like FATF (Financial Action Task Force).
The market watchdog may also consult the practices followed by its counterparts in some other countries to understand the best regulatory framework for AML/CFT regulations.
The Sebi guidelines require all market intermediaries to adhere to specified client dealing procedures and maintain records for regulatory or investigative references.