Sebi has pointed out that according to the provisions of the Prevention of Money Laundering Act 2002, which came into effect in July last year, every intermediary has to maintain records of all cash transactions of more than Rs 10 lakh in value or its equivalent.
The intermediaries are also required to keep records of transactions, integrally connected to each other, taking place within one calendar month.
They also have to keep track of suspicious transactions made through any non-monetary account such as a demat account or a security account.
The guidelines, which say that principal officers have to be designated to report suspicious activities and also broadly define types of transactions to be tracked, will be applicable to all stock brokers, sub-brokers, share transfer agents, deed trustees, merchant bankers, underwriters, portfolio managers and investment advisers. The regulator has also promised to come out with more detailed rules.
Yesterday's guidelines mandate intermediaries to put in place anti money-laundering and customer due diligence procedures, directions on types of customers to be designated as special category, a stricter client identification procedure, monitoring and reporting of customer transactions and the nature and duration of their records.
The guidelines also require companies to come out with a standard to be followed while recruiting employees for handling or monitoring risky and suspicious transactions.
