SECP Announces New AML Regulations

In an attempt to prevent Pakistan from being placed on the grey list, the Securities and Exchange Commission of Pakistan (SECP) issued the new Anti Money Laundering and Countering Financing of Terrorism Regulations, 2018 that comply with Financial Action Task Force (FATF) recommendations forcing Pakistan to comply as a member of the Asia Pacific group against money laundering.

According to the SECP, the new set of regulations are focused on risk-based approaches to fight money laundering and terrorist financing such as requiring the identity of the beneficial owner to be determined before engaging in business.  In order to help securities brokers, insurance companies, modarabas, and non-banking finance companies comply with the new anti-money laundering (AML) and counter terrorist financing (CFT) regulations, the SECP has also created a set of regulations to help ease institutions into the new regime.  The SECP also stated, the new regulations “supersede all earlier notifications which had separate AML and CFT requirements for financial institutions regulated by the SECP.”

Pakistan was recently nominated to be placed on the grey list in February 2018 by a global watchdog based in Paris, however the decision is not final and will be discussed in a FATF meeting this month.  Dr Miftah Ismail, former finance minister of Pakistan, stated that while FATF has not decided if Pakistan should join the list or not, Pakistan will develop and work on an Action Plan within the time frame and has expressed his disapproval by stating that placing Pakistan on the list will only cause the country embarrassment, as it will not affect the country’s economy.


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