Friday, June 21, 2019

Sebon brings new AML guidelines

The capital market regulator has introduced new guidelines on anti-money laundering (AML) listing out five dozen transactions of companies in the securities and commodities market that should be notified to the Financial Information Unit (FIU) of the central bank as suspicious transactions.
The new guidelines on prevention of money laundering and terrorist financing released by the Securities Board of Nepal (Sebon) today requires companies – licensed by the capital market regulator – that are termed as reporting entities and include stock brokerage firms, merchant bankers and stock and commodity exchange company, to flag any suspicious transaction to the FIU for further investigation.
The suspicious transactions range from investment that seems to be made from tax-evaded money to discrepancies in the address of any client and transactions from another person's name, according to the guidelines. “The reporting agencies should send suspicious transaction report to the FIU within three days,” the new guidelines reads, adding that it aims at implementing the Asset (Money) Laundering Prevention Act, 2008 and prevent and discourage the money and asset laundering and financing of terrorist activities through the abuse of the securities and commodity market. “Any transaction that seems unusual in terms of size, value, nature and source, should be reported.”
The reporting agencies are also required to send each transaction report to the FIU above the value of Rs 1 million, apart from the suspicious transaction reports, the new guidelines read.
According to the new guidelines, reporting entities in the securities and commodities market are also required to categorise their clients under high-risk, risk and general risk for further scrutiny and reporting of their transactions. “Some of those who fall under high-risk are the clients who carry out transactions without coming at the fore, non-residential clients, high ranking politicians, business persons and officials in social and financial sectors; and transactions carried out with firms, companies and organisations who do not have their regulators,” it further reads, adding that the FIU forwards the cases to the respective law enforcement and investigation agencies for further investigation after analyzing and assessing the information based on the information and reports from the reporting entities.
The capital market regulator has also warned that those reporting agencies who fail to comply with the anti-money laundering laws, regulations and guidelines will have to face stern action. “Those violating the provision risks facing the fine up to Rs 50 million and cancellation of the license,” the guidelines further reads.
Nepal is currently under scanner of the global agency that looks after the AML/CFT as the Financial Action task Force (FATF) will review the country’s status in 2020. Almost all the regulatory authorities have been very serious on implementing the anti money laundering law to keep Nepal out of the black list of the FATF.

No comments: