In order to boost efforts against money laundering, Securities Brokers have been asked to submit details regarding ‘Politically Exposed Persons’ to the Pakistan Stock Exchange.
Pakistan was officially put on a terror-financing watchlist, maintained by the Financial Action Task Force (FATF) and since then, regulators in Pakistan have intensified efforts against money laundering.
The notification revealed that all market participants have been reminded of the Securities and Exchange Commission of Pakistan’s (Anti Money laundering and Countering Financing of Terrorism) regulations concerning money laundering.
The Anti Money Laundering and Countering Financing of Terrorism Regulations 2018 issued by the SECP require Securities Brokers to develop and implement appropriate internal risk management systems, policies, procedures, and controls to determine if any customers or a beneficial owner is a ‘Politically Exposed Person.’
Politically Exposed Persons generally include individuals in prominent positions, such as senior politicians: senior government, judicial or military officials; senior executives of State Corporations and their family members and close associates.
In addition, securities brokers shall also perform Enhanced Due Diligence of foreign and domestic PEPs, their family members and close associates in accordance with 9(4) of the Regulations, in addition to other requirements.
With respect to customers identified as PEPs, their family members and close associates, Securities Brokers have been advised to submit the following information
- The Name of the Client and the beneficial owner identified as a PEP
- The status of the client (customer, or beneficial owner)
- UIN number of the PEP
- Nature of the PEP i.e. (whether he is from a foreign or domestic origin.)
The PSX directed the securities brokers to submit the information to the exchange by September 05, 2018.