In line with the agenda of combating money laundering and terrorist financing activities, the Securities and Exchange Commission of Pakistan (SECP) has established an Anti-Money Laundering (AML) Cell to effectively address any potential of money laundering within the capital markets, insurance, the NBFCs and the not-for-profit corporate sector.
The SECP has approved thresholds for various sectors for reporting of investments made in securities markets, the NBFCs and the insurance sector. The AML cell comprises of senior SECP officers from each supervisory area.
For life insurance products, the defined threshold is the annual premium of Rs. 5 million for a single life policy. For securities brokers the threshold shall be Rs. 5 million for an individual investor, Rs. 25 million for corporate entity and Rs. 20 million for propriety broker.
For AMCs/modarabas/NBFCs, the threshold is of 100 million for corporate entities, 50 million for trusts and Rs. 10 million for individual investment.
No reporting will be required of financial institutions, public listed companies, licensed entities, AMCs, mutual funds, insurance companies and government administration/entities investing in AMCs/modaraba/NBFCs.
Further, any donation of Rs. 5 million and more from a single source to a not-for-profit section 42 company will also be reported to the SECP.
The AML Cell will develop a database of such reports for its analysis on a consolidated basis and initiate further probe wherever needed. The efforts are expected to curb the potential of any ill-gotten money finding its way into the capital markets, the NBFCs, corporate not-for profit and the insurance sector of the country.
The establishment of AML Cell and consolidated supervision by the SECP will bolster its efforts to curb the ML/TF menace and will help Pakistan attain a compliant assessment from the money laundering international assessors during the upcoming AML/CFT mutual evaluation assessment due in 2018.