{"id":67979,"date":"2023-06-26T18:33:27","date_gmt":"2023-06-26T13:03:27","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=67979"},"modified":"2024-06-01T13:59:00","modified_gmt":"2024-06-01T08:29:00","slug":"sebis-recent-circular-on-amendment-to-the-guidelines-on-aml-cft","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebis-recent-circular-on-amendment-to-the-guidelines-on-aml-cft\/","title":{"rendered":"SEBI\u2019s Recent Circular on Amendment to the Guidelines on AML\/CFT"},"content":{"rendered":"

On 16 June 2023, SEBI vide circular SEBI\/HO\/MIRSD\/MIRSDSECFATF\/P\/CIR\/2023\/091 amended the Guidelines on Anti-Money Laundering<\/a> (AML) Standards and Combating the Financing of Terrorism (CFT) for market<\/a> intermediaries. SEBI<\/a><\/strong> has highlighted the key modifications to existing AML norms, including the definition of a “group” as per amended rules, requirements for issuing policies and procedures for dealing with money laundering and terrorist financing, client verification procedures, registration of non-profit organizations on the DARPAN Portal etc. The present article shall discuss the key modifications made by the Board.<\/p>\n\n\n\n

Amendments to the Guidelines on AML\/CFT<\/h2>\n\n\n\n

An amendment<\/a> to the Prevention of Money Laundering<\/a><\/strong> (Maintenance of Records) Rules, 2005 was made by the Government of India (GOI)  through gazette notification S.O. 1074(E) dated March 07, 2023 (PML eGazette dated March 07, 2023) with immediate effect.<\/p>\n\n\n\n

In view of the amendments to the same and for further enhancing the effectiveness of the AML\/CFT framework, certain provisions of the aforesaid Master Circular  were modified as mentioned below: –<\/p>\n\n\n\n

Insertion of a New Paragraph 7A<\/h2>\n\n\n\n

There shall be the insertion of the following paragraph after paragraph 7 and before paragraph 8, namely- “7A. “group” shall have the same meaning assigned to it in clause (cba) of sub-rule (1) of rule 2 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 as amended from time to time.”<\/em><\/span>1<\/sup><\/a><\/span><\/p>\n\n\n\n

This addition can help in providing clarification regarding the meaning of group as provided under the legislation.<\/p>\n\n\n\n

Substitution of Sub-Para (i) of Para 8<\/h2>\n\n\n\n

There shall be the substitution of sub-Para (i) of Para 8 with the issuing a statement of policies and procedures and implement, on a group basis<\/a> where applicable, for dealing with ML and TF reflecting the current statutory and regulatory requirements.<\/em>“<\/span>2<\/sup><\/a><\/span><\/p>\n\n\n\n

It must be noted that the term “and implement” have been added to the new provision, which lays emphasis on the implementation of such policies and procedures rather than just the issuance of the same, which can help in dealing with Money Laundering (ML) and Terrorist Financing (TF) in an effective manner.<\/p>\n\n\n\n

Modifications to Para 11<\/h2>\n\n\n\n
    \n
  1. Various modifications have been made to Para 11, such as the substitution of 11
    (i), which the following paragraph –
    (ii) Verify the client’s identity using reliable, independent source documents, data or information. Where the client purports to act on behalf of a juridical person or individual or trust, the registered intermediary shall verify that any person purporting to act on behalf of such client is so authorised and verify the identity of that person.” <\/em><\/span>    3<\/sup><\/a><\/span><\/li>\n<\/ol>\n\n\n\n